The first settlements in the area were two forts built in 1856 during the Puget Sound War to protect future settlers against possible uprisings by the native population. Fort Patterson, a few miles downstream, and Fort Tilton, a few miles upstream, were built with the help of Indians led by Chief Patkanim, and both abandoned within 2 years after interactions with the local tribes remained peaceful. A historical marker can be found north of Fall City on the Fish Hatchery Road where Fort Tilton once stood.
A trading post was established near the present day location of the Last Frontier Saloon in 1869 and became a hub of the local economy. Fall City was known at the time as "The Landing", as shallow water and rapids upstream on the Snoqualmie were impassable to the large dugout canoes used for transporting goods. In the early 1870s the first local mill in the Snoqualmie Valley was opened at the mouth of Tokul Creek, just downstream from Snoqualmie Falls and just upstream from where Fall City would be. The Fall City Post Office opened June 10, 1872.
The first small steamboats started ferrying supplies up the river in 1875. In the late 1880s, a group of Puget Sound businessmen founded and started building the Seattle, Lake Shore & Eastern railroad including a line up into the upper Snoqualmie Valley, in an attempt to build a line over the Cascade Range. The land claim holder at the time, Jeremiah "Jerry" Borst, had Fall City surveyed and platted in anticipation of the people the railroad would bring, but was disappointed in 1889 when the railroad line was built a mile away from the community.
However even a mile away the railroad combined with the first bridge over the Snoqualmie River greatly improved the business of the local lumber mills and farmers, and made the area and its scenic features (such as Snoqualmie Falls) accessible to tourists. Hundreds moved to the area over the next two decades.
When the Sunset Highway connecting Seattle with eastern Washington through Fall City was improved in the early 1910s, it further accelerated the economic and residential development of the area. By the late 1920s, most of the population either worked in the burgeoning tourist trade or commuted to work west toward Issaquah and Seattle.
The Great Depression followed by gasoline rationing during World War II hurt the tourist trade in Fall City. Tourism was further hampered after the war as U.S. Highway 10 (now Interstate 90) was rerouted south directly from Preston to North Bend, bypassing Fall City and Snoqualmie. The local economy suffered further impacts as the local logging mills started closing.
Today, Fall City is a bedroom community to the high tech industry of the Seattle metropolitan area with large suburban estates just outside the community juxtaposed with the historical homes and farmsteads built in its heyday.
According to the United States Census Bureau, the Fall City Census-designated place (CDP) has a total area of 1.3 square miles (3.4 km²), all of it land.
Fall City sits at the confluence of the Snoqualmie River and the Raging River and is sometimes subject to flooding during the autumn and winter months. More typical is a strong east wind as pressure gradients carry higher pressure air across Snoqualmie Pass and down the Snoqualmie Valley. To the west of Fall City is Klahanie, Sammamish, and Issaquah to the southwest. Preston is to the south, and Snoqualmie to the southeast. Spring Glen and Tokul are to the east.
Fall City is located at 47°33′59″N 121°53′42″WCoordinates: 47°33′59″N 121°53′42″W.
The climate in this area has mild differences between highs and lows, and there is adequate rainfall year-round. According to the Köppen Climate Classification system, Fall City has a marine west coast climate, abbreviated "Cfb" on climate maps.
Law enforcement is serviced by the King County Sheriff's Office.
According to the Federal Aviation Administration, the Fall City Airport is a small private airport community located roughly 2 miles (3 km) to the east of the city in Spring Glen at Latitude: 47-33-34.366 N & Longitude: 121-51-49.413 W. at an elevation of 140 feet (42.5 m). The airport is owned by the Fall City Airport Association. It has no traffic control tower.