In 1854, James Kerby obtained the first donation land claim in what became Kerbyville. Nearby gold fields attracted many miners, and the town became a center of commerce. Kerby became the first postmaster in September 1855 when the Kerbyville Post Office was established. In 1856, Kerbyville was voted Josephine County's second county seat. The growing town had two hotels, the Sawyer/Union and the larger Pioneer Hotel. Several saloons served area miners and residents, and several general stores supplied both miners and settlers. Town doctor Dr. Daniel Holton donated land on which a two story jail was built, with four cells on the first floor and two on the second, and a small sheriff's office was later added to the side. A nearby oak served as the hanging tree. Kerbyville's prosperity declined, and in 1883 the county seat was moved to Grants Pass, where the Oregon and California Railroad arrived in 1885. Today, the Kerbyville Museum and History Center holds many exhibits and artifacts about the settlement of the Illinois Valley and Kerbyville's glory days.