The valley was home to Chumash Indians before becoming one of many Spanish land grants along the California coast. It became a cattle ranch in 1837, when it was granted to Fernando Tico. In 1853 he sold it to prospectors searching for oil, without much success. By 1864, the area had been settled, and in 1874, the City of Nordhoff was founded.
The city was renamed Ojai - a Chumash word meaning 'the Nest' or 'Valley of the Moon' - when the name Nordhoff was deemed too German post-World War I. The main turning point in the development of the city was the coming of Edward Drummond Libbey. He saw the valley and fell in love, thinking up many plans for expansion and beautification of the existing rustic town. He helped design, finance and build a more modern and fitting downtown, including a Spanish-style arcade, a bell-tower reminiscent of the famous campanile in Havana, and a pergola opposite the arcade. His buildings still exist today in exquisite condition as the symbols of the city and its valley.
To thank Libbey for his gifts to the town, the citizens proposed a celebration to take place on March 2nd of each year. Libbey declined their offer to call it "Libbey Day," and instead suggested "Ojai Day." The celebration still takes place each year. Today, Ojai is an active, though small, community. Libbey's pergola was destroyed in 1971, and was recently rebuilt to complete the architectural continuity of the downtown area.