Humans have lived in the Big Butte Creek area for at least 8,000 years. The Klamath, Upper Umpqua, Takelma, and Latgawa tribes of Native Americans inhabited the watershed until they were driven out in the Rogue River Wars of the 1850s. On Christmas Eve, December 24, 1855, Captain E. A. Rice along with 34 other men attacked a Native American encampment near the creek's mouth. Eighteen Native American men were killed, all the women and children were captured, and the camp was burned to the ground. Most were relocated to Indian reservations. Non-indigenous settlers first arrived in the early 1860s, and agriculture, ranching, and logging industries quickly developed. Big Butte Creek was named by early settlers for its close proximity to Mount McLoughlin (also known as Snowy Butte), as was nearby Little Butte Creek.