The town's founding dates to the mid-1850s with the building of a flour operation, Forbes Mill, by James Alexander Forbes along Los Gatos Creek. The mill's two-story stone storage annex has been preserved as a museum just off of Main Street.
The settlement that was established in the 1860s was originally named for the mill, but the name was changed to Los Gatos after the Spanish land grant. The town was incorporated in 1887 and remained an important town for the logging industry in the Santa Cruz Mountains through the end of the 19th century. In the early 20th century, the town became a thriving agricultural town with apricots, grapes and prunes being grown in the area. Along with much of the Santa Clara Valley, Los Gatos became a suburban community for San Jose beginning in the 1950s, and the town was mostly built-out by the 1980s.
Downtown Los Gatos has retained and restored many of its Victorian-era homes and commercial buildings. Other notable buildings are the Forbes Mill annex, dating to 1880 and now housing a history museum; Los Gatos High School which dates from the 1920s; and the Old Town Shopping Center, formerly the University Avenue School (the school was established in 1882; the current buildings date to 1923).
A number of brick buildings in Downtown Los Gatos were destroyed or heavily damaged in the 1989 Loma Prieta earthquake, though the district was quickly rebuilt and has made a full recovery.
The city name is pronounced as it would be in Spanish, "lohs gah-tos".
Transit in Los Gatos is largely automobile-based, along with a significant amount of pedestrian and bicycle traffic. However, if you do not wish to drive, walk, or ride a bicycle, then there is really only one alternative, and that is VTA (Valley Transportation Authority). This organization runs all public transit for the Santa Clara valley area, hence the name. The VTA operates many bus lines along with three light rail train lines, but, if your intent is only to get around Los Gatos, then the buses are all you need to think about. There are two lines that serve Los Gatos, line 48 and line 49. Both serve the same general loop around the town, in opposite directions, and both convene at the Winchester Transit Center/Light Rail station in nearby Campbell. Fares vary based on age, and there are several pass options available. Details are available at the VTA website, which can be found here: . Also, for additional information on bus lines 48 and 49, go to these sections of the VTA website:  (line 48) and  (line 49).