French Corral was one of the first mining camps along the San Juan ridge and was named after the first settler in the area, a Frenchman who built a corral to house his mules in 1849. When gold was discovered a few years later along the ancient San Juan river basin, a mining camp was quickly established at the corral. Placer and hydraulic mining took place near French Corral from the mid-1850's until the 1890s. Around 1867, a seven-carat diamond was found in one of the sluice boxes, the largest diamond ever found in California.

Because of the extensive hydraulic mining at French Corral and at hundreds of other mines along the ridge, the three principal mining companies in the area (North Bloomfield Mining Company, Milton Mining and Water Company, and Eureka Lake and Yuba Canal Company) constructed a remarkable series of ditches and flumes to the mines from reservoirs high in the Sierras more than 300 miles away. In order to properly manage the water flow to the mines, the Edison Company build the world's first long-distance telephone line. French Corral was the terminus for the line which ran 60 miles to Bowman Lake via Birchville, Sweetland, North San Juan, Cherokee, North Columbia, Lake City, North Bloomfield, Moore’s Flat, Graniteville, and Milton.

At its peak, when French Corral was a centre for hydraulic mining, the town had a population in the thousands. It is estimated that between three and four million dollars worth of gold was extracted. Today, very little remains of the town, except for the iron-doored Wells Fargo Express building from 1853 and the site of the Milton Mining and Water Company office, where the telephone line was housed, marked only by a plaque.