In 1852, sailors who had deserted their ship near Crescent City, started for the newly discovered gold fields at Jacksonville, but found rich deposits at a location in the Illinois Valley just 25 miles south of the present Grants Pass. The promise of gold caused Grants Pass to grow quickly. This discovery at "Sailor Diggin's" immediately became an important mining center with a population of several thousand. The name was later changed to Waldo in honor of William Waldo, brother of Daniel Waldo, a prominent figure in early Oregon history. In 1858, many miners left for new discoveries on the Frazier River of British Columbia never to return again. Nothing remains today of the many mining towns that sprang up in the Illinois Valley.

The valleys erupted in Indian wars between 1850 and 1857 as regular troops from Fort Jones, California and volunteers fought with the Indians. The final peace treaty was held on the Illinois River near Agness in 1855 prior to the last battle. After this final war, the Indians were moved to the Siletz and Grande Ronde Reservations on the northern Oregon Coast.

The Post office was established March 22, 1865. A part of Jackson County at that time, Grants Pass remained only a stage station until the arrival of the railroad. In 1885 a row of townships along the west border of Jackson County was annexed to Josephine County to establish a rail head in Josephine County.

In 1865 Grants Pass was selected to honor General Ulysses S. Grant's success at Vicksburg. Interestingly, until after 1900 our name still retained the original spelling of Grant's Pass, using an apostrophe. The Oregon-California Railroad line was completed to Grants Pass on Christmas Eve, 1883. The rapid growth of population in the county brought with it tradesman of many types, including miners, farmers, lumberman, and orchardists. Grants Pass became the trading center of the county. By the 1890’s it could boast of having its own opera house , the Grants Pass Water, Light and Power Co., which generated power at a dam a few hundred feet west of the present Caveman Bridge. The Rogue River was spanned by the first of several bridges at about 5th St.  In 1887, the first church built in Grants Pass was the Newman Methodist Church on the site of the present building which was completed in 1890 under the leadership of Rev. T.L. Jones.

In 1874 a local hunter, Elijah Davidson stumbled upon an underground cave system when his dog disappeared into the side of a mountain while chasing a bear. He didn't realize it, but he had discovered what became known as the "Oregon Caves" and the first road to the Caves was opened thirty years later in 1904.

In 1894, Mary Peters "Indian Mary" applied for squatters' rights for land on which her father Umpqua Joe had built a cabin on the hill overlooking Hellgate Canyon. Her father had been an Indian scout during the Rogue River Indian Wars. She received a 25 year deed and formed the smallest Indian Reservation in the United States. Josephine County eventually converted the land into the beautiful park we now call "Indian Mary."