The first permanent settlement of whites in Idaho country was the settlement of the Mormon colony at Franklin in Cache Valley, but it was the lure of gold that brought the first major wave of settlers. Just three years after gold was discovered, the territory of Idaho was created, in 1863, consisting of ten counties. The new territory included what is now all of Montana and most of present-day Wyoming. At the peak of the mining boom as many as 70,000 whites may have been in Idaho Territory. By 1870, however, this number had dwindled to 15,000. Mining was Idaho's chief producer of wealth until the beginning of the twentieth century when agriculture became the number one industry.

In 1866 the first district land office in Idaho opened in Boise. Other district offices included Lewiston in 1866, Oxford in 1879, Hailey in 1883, Coeur d'Alene in 1884, and Blackfoot in 1886. After the Civil War, Confederate refugees settled in Idaho. Others came to Idaho during a renewed mining boom during the 1880s and 1890s and with the coming of the railroads to the farm land of southern Idaho.

Idaho's transition from a territory to statehood was long and difficult. When the new Idaho Constitution was drafted in 1889, territory officials sought to redress sectional antagonisms. The only exception was that a section in the constitution was written denying Mormons the right to vote and to hold public office. Many compromises had to be reached in order to set the boundaries of the new state. Idaho became a state on 3 July 1890.

Idaho was never a “melting pot,” but did have its share of ethnic groups such as Scandinavian converts to the Mormon faith who colonized in eastern Idaho. Coeur d'Alene mines attracted miners from Wales and immigrants from the Balkans, and the Finns settled in the high mountain valleys near Payette Lakes. Hundreds of Chinese came to Idaho in the 1860s and 1870s to work in the mines. The Basque migration from the Spanish Pyrenees came primarily to Idaho, northern Nevada, western Oregon, and California as sheepherders. Japanese immigrants began settling in southwestern Idaho prior to World War II. Other Japanese settled near Idaho Falls and Pocatello. Between 1900 and 1910, reclamation projects opened desert lands for farming. This brought a new wave of settlement from nearby states, especially Utah.

Idaho's Native American population lives on four reservations: Nez Perce Reservation, Coeur d'Alene Reservation in northern Idaho, Fort Hall Reservation south of Pocatello, and Duck Valley Reservation in Owyhee County. Many Kootenai Native Americans reside in an enclave near Bonners Ferry, and some Kalispell Native Americans live in an enclave at Cusick on the Idaho-Montana border.

Idaho's development was often turbulent and yet tolerant and just at times. The Mormon east, non-Mormon west, and the northern mining part of the state developed three distinct cultures that eventually grew and bonded into the state of Idaho.