Japanese immigrants first settled in the San Jose Santa Clara Valley. For this reason, this is where the site for Japantown started. Even after many decades, the San Jose Japantown remain one of the remaining authentic Japanese towns that can be found inside the US. The San Jose Japantown acts as a popular spot for tourists to travel to as well as for the locals to explore. This is because Japantown offers a variety of traditional Japanese shops, art galleries, and museums. Around the 1890s, the abundant farm work in the Santa Clara Valley drew more and more Japanese immigrants in. But as more Japanese immigrants showed up the problem of an established community occurred. The Japanese immigrants did not have an established community that they could be a part of. As such, they first settled in San Jose's Chinatown. As Chinatown offered an Asian feel, it became a place for familiar lodging for the Japanese immigrants away from anti-Asian racism.
Despite the fact that the Japanese immigrants were staying in Chinatown, in the early years of the 20th century, these Japanese immigrants began to build their own Japanese town beside where they were originally settled. Within this new community, they began to find things such as cultural support, employment, shelter, and a way of life that represented their Japanese heritage. When Japantown was first formed, it acted as a place for migrant workers and Japanese farmers who needed supplies to get them. But as time went on, more Japanese immigrants started to settle in Japantown. This was partially due to the Gentleman’s Agreement of 1907. Through this agreement, the US would not impose restrictions on Japanese immigration. After this agreement took effect, an emergence of Japanese American families started. A more Japanese families and immigrants started to move into Nihonmachi, the town began to grow. It was during this time that some of the most famous buildings that are located in Nihonmachi were built. These included Kuwabara Hospital, and Okida Hall.
In May of 1942, the building of Japantown was put on hold. This was a result of war time hysteria that ultimately lead to the formation of the Japanese internment camps. In the internment camps, people who were of Japanese ancestry (even US citizens), were forced to leave the Santa Clara Valley and relocate to camps that were far away from the west coast. As a result, this left many businesses and sometimes multiple streets looking like ghost towns. But in 1945, people started to return to the west coasts. Following the end of the internment, the 1950s and 60s were part of the most active times in Japantown's history. This was due to the fact that there were three generations of Japanese Americans moving through Japantown.
Beginning from the 1980s, Japantown has had multiple changes and upgrades. This includes things such as building new houses, redesigning and rebuilding buildings, and redeveloping the place that was once Chinatown. In order to keep the heritage of the town, historical markers were placed throughout the town. Japantown, since its beginning, has always been made from small businesses and the residents. This means that no one corporation, organization, or family runs Nihonmachi.