Costanoan Indians lived in the area before the arrival in the 1800s of Don Guillermo Castro, from whom the community took its name. Castro was a soldier and surveyor with the Mexican army who received a land grant of 27,000 acres. The grant encompassed what is now Castro Valley and Hay ward.

Castro, a gambler, was forced to sell his land to pay his debts, and he sailed for Chile in 1864. Methodist minister Zachariah Hughes and William Mattox were among those who purchased large tracts from Castro. Several families who settled in the area operated huge cattle and poultry ranches.

That rural atmosphere remains today. There is a continued interest in horse breeding, showing and riding for fun and profit. Plentiful flower, fruit and vegetable gardens also help retain the rustic ambience. Several neighborhoods still lack sidewalks and boast oversize lots. The recent opening of the Castro Valley BART station presented local residents with a new commute alternative to the busy Interstate 580 corridor.