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By 1845, the population of the pueblo had increased to 900, primarily due to American immigration.

Foreign settlement in San Jose and California was rapidly changing Californian society, bringing expanding economic opportunities and foreign culture.

Forbes, founder of Los Gatos, California (granted Rancho Potrero de Santa Clara), Antonio Suñol, Alcalde of San Jose (granted Rancho Los Coches), and José María Alviso, Alcalde of San Jose (granted Rancho Milpitas).

In 1835, San Jose's population of approximately 700 people included 40 foreigners, primarily Americans and Englishmen.

San Jose was officially founded as California's first civilian settlement on 29 November 1777, as the Pueblo de San José de Guadalupe by José Joaquín Moraga, under orders of Antonio María de Bucareli y Ursúa, Viceroy of New Spain.