Around 1860, prospectors and homesteaders began settling at this junction of mountains and waterways. The first cabin, built by Nat Rich and Bob Hendricks, still stands in Poncha Springs. In 1873, the Hutchinson Homestead house became the valley's first frame house of milled lumber. The Hutchinson and McPherson families homesteaded in the mid 1860s, raised cattle, and operated one of the area's earliest grocery stores. The Hutchinson ranch east of Poncha Springs on Highway 50 is listed on the National Register of Historic Places and is now open as the Hutchinson Homestead Ranch and Learning Center. John Burnett, the area's first Indian Agent, homesteaded in 1865, and his wife, Minerva Maxwell Burnett, was an early school teacher; a log cabin on their ranch served as an Indian trading post. By the mid 1870s the settlement was booming. James True laid out a formal town, and stagecoach travelers stopped at the Jackson and Poncha Springs Hotels. Otto Mears, a San Luis Valley wheat farmer, built a toll road over Poncha Pass to reach the flour mill at Nathrop; it preceded the railroad and began his career as the Pathfinder of the San Juans. When the Denver and Rio Grande Railroad arrived in 1880, the town's population grew to more than 2,000. Seven years later, fire destroyed most of the town's frame buildings, including 17 saloons, but the schoolhouse survived and now serves as Town Hall. The settlement was first called South Arkansas, then renamed Poncho Springs in 1877, and later Poncha in 1924. The name referred in part to the area's 99 hot springs, long used by native peoples and later developed as tourist attractions, while the other part may have come from the Spanish word poncho, translated here as cape or peaceable, or from the Ute word pounchay, meaning foot path.