Born of a vision that was not to be fully realized, Junction City was platted in 1870 by Ben Holladay, the West Coast railroad promoter. Holladay was building the Oregon & California Railroad south from Portland, laying track on both the east and west sides of the Willamette River. Junction City was to be the meeting point for the lines.
The lowlands around the town site had been populated with a sprinkling of wagon train settlers for 25 years. A small river settlement, Lancaster, flourished nearby. But Junction City first became the area's center of commerce.
However, Holladay's prediction that the town would be a "second Chicago" proved fanciful. The east side rail line never reached Junction City. Still, the town was a division point on what became the Southern Pacific Railroad, with a roundhouse, crew quarters and even a small Chinatown. A second railroad, the Oregon Electric, arrived in 1912. But the Southern Pacific moved its shops to Eugene in the 1920s.
By then, however, Junction City was an established farm community and a commercial center. The early settlers, primarily with roots in the South, had been joined by others from around the country. In 1902, a Danish developer, A.C. Nelson, acquired a tract east of town and successfully promoted settlement by fellow Danes. Six decades later,
their culture would become the nucleus of the Scandinavian Festival.
In the post-World War II era, the town saw steady growth. As retail trade ebbed to Eugene, local commerce became more service-oriented and more local breadwinners became commuters. However, the city acquired a solid manufacturing base in the late 1960s with the birth of a recreational vehicle industry that by the turn of the new century, had spread to neighboring cities.