The written history of the area of Portola Valley, California dates back to 1833, when a square league of land was given to Domingo Peralta and Máximo Martínez by Governor José Figueroa to form the Rancho Cañada del Corte de Madera. At that time the land Peralta and Martinez has was used for lumbering and cattle grazing.
In the 1850s, after the Mexican-American War, the logging town of Searsville formed. The people living in Portola Valley Services many of the Redwood tree loggers who helped with construction efforts during and after the Gold Rush. The town of Searsville lasted along the outskirts of San Hill Road until 1891, when logging operations in that area shut down.
By the 1880s, Andrew Smith Hallidie, a wire rope manufacturer who invented the first functioning cable car system and promoted the Clay Street Hill Railroad in San Francisco, had built his country home of Eagle Home Farm in Portola Valley. In 1894, Andrew Hallidie built a 7,341 foot long aerial tramway from his house to the top of Skyline, which went up to 120 feet up in the air and was able to transport ore and other goods through it. However, the tramway was removed shortly after his death in 1900 and many of the parts of the tram were moved to Mexico.
In 1964, the rural area of Portola Valley was incorporated as a town. The town council choose the name Portola in honor of the Spanish explorer Gaspar de Portolá y Rovira, who led the first party of Europeans to explore the San Francisco Peninsula in 1769.