Native Americans mined copper in and around what would later be Houghton thousands of years before European settlement. "French explorers had noted... [its] existence [in the area] as early as the seventeenth century, [and in] 1772 Alexander Henry had prospected for copper on the Ontonagon River near Victoria."
Many Cornish and Finnish immigrants arrived in the Houghton area to work in the copper mines in the mining boom that made Copper Country on the Keweenaw Peninsula; both groups have had a great influence on the culture and cuisine of the local area. The Finns and others called much of the area Copper Island. Smaller numbers of French-Canadian immigrants moved to Houghton, while more of them settled elsewhere in Houghton County.
The last nearby mines closed in the late 1960s, but a school founded in 1885 by the Michigan State Legislature to teach metallurgy and mining engineering, the Michigan College of Mines, continues today under the name of Michigan Technological University and is the primary employer in the city.
The first known European settler of Houghton was named Ransom Shelden, who set up a store named Ransom's near Portage Lake, though it is unclear whether this was in the same building as the 1852 Shelden and Shafer drugs, sometimes described as "the first commercial building constructed in Houghton," which Shelden owned with his son Ransom B. The main street of Houghton, variously called "Sheldon Avenue," (incorrectly) Sheldon Street, and Shelden Avenue, is named for him. In the 1970s the construction of a parking deck and the connection of downtown stores to create Shelden Center significantly changed the downtown.