On May 26, 1863, Barney Hughes, Thomas Cover, Henry Rodgers, William Fairweather, Henry Edgar and Bill Sweeney camped along a small stream fringed with alder trees. Fairweather and Edgar went to prospect a place of rimrock. Fairweather dug the dirt, filled a pan and told Edgar to wash the pan in the hope of getting enough gold to buy tobacco. When the first pan turned up $2.40, they knew the gulch had great potential.
Word spread like wildfire. Miners covered the hillsides with tents, brush shelters and crude log cabins. On June 16, the Varina Town Company platted the town. Some, supporters of Jefferson Davis and the Confederacy, intended to name the new town after Jefferson Davis' wife, Varina. But the newly elected miners' court judge, Dr. G. G. Bissell, was an equally stubborn Unionist. When it came time to file the official documents, he submitted the name Virginia instead.
Designation as territorial capital came on the heels of the great gold rush when Alder Gulch had gathered most of Montana's population. At its peak, 10,000 people flooded the area named "Fourteen-mile City" for the numerous settlements that lined the gulch. Virginia City became the largest settlement with an estimated population of 5,000 by mid-1864. It rapidly became the territory's first social center and transportation hub.
Virginia City is today considered the best- preserved example of the many placer mining camps that flourished during the 1860s throughout the Rocky Mountain West. It provides an exceptional sample of commercial architecture of the mid-nineteenth century. The greatest concentration of historic buildings dates to the 1870s, but some of the buildings' later modifications also have historical significance. The surrounding landscape has been disturbed very little since the mining era ended in 1942. Its historic buildings, structures, and settings are significant for their association with the evolution of a frontier community and society based on the mining of precious metals.
Virginia City today has approximately 150 year-round residents and about 300 summer residents. It sits at an elevation of 5,680 feet, in a bowl along the edge of Alder Gulch. Approximately 70,000 visitors come through Virginia City annually.