The town was first settled in 1777 . The area that now makes up downtown was first settled twenty years later , when the town of San Jose moved somewhat inland from its original location on the banks of the Guadalupe River . In 1850 , San Jose incorporated to become California 's first city and the location of California 's first state capitol . Despite widespread destruction caused by the 1906 San Francisco earthquake , a number of neighborhoods around Downtown San Jose still retain their original , pre-1906 housing stock . These neighborhoods include the South University , Naglee Park , Hensley Historic District , Reed Historic District and Vendome neighborhoods
1906 San Francisco earthquake
1906 San Francisco earthquake
Downtown San Jose