Scotts Valley was named after Hiram Scott, who purchased Rancho San Agustin, including the valley, in 1850 from Joseph Ladd Majors. Before Majors, the property was owned by José Bolcoff. Bolcoff was the original settler and first European to claim title and live in what was to be Scotts Valley. He was born Osip Volkov around 1794 in Petropavlovsk-Kamchatsky, Siberia. Working as a fur trader around 1815, Bolcoff jumped ship on the Monterey Bay shoreline, quickly assimilated into the Spanish culture, and was well received by the Spanish authorities. Volkov had his Russian Orthodox Baptism validated in Mission Soledad in 1817, and was given the Spanish name José Antonio Bolcoff. Bolcoff lived with and traveled with Alta California's governor Pablo Vicente de Solá, acting as an interpreter. Becoming a Mexican citizen in 1833, Bolcoff moved his family to his 4,400-acre (18 km²) land grant building, an adobe casa historians speculate was located near present-day Kings Village Shopping Center. Bolcoff relinquished his interest in the Rancho San Augustin, selling and accepting $400 from Joseph Ladd Majors, also known as Don Juan José Mechacas. July 7, 1846 marked the shift of power in the region from Mexico to the United States.

Hiram Scott built the Greek revival style Scott House in 1853. Situated behind City Hall, it is a Santa Cruz County Historical Trust Landmark, and is on the National Register of Historic Places. The house originally stood on Scotts Valley Drive, near where a Bank of America branch is now located. Scotts Valley's most famous resident was film director Alfred Hitchcock, who lived in a mountaintop estate above the Vine Hill area from 1940 to 1972. Florence Owens Thompson, made famous by Dorothea Lange's Migrant Mother photograph, died in Scotts Valley in 1983.