The Louisiana Territory had contained some but not all of what is now Montana. Some of the southwest belonged to Great Britain until 1846, when the Oregon Treaty made it U.S. territory. That western bit was part of the Oregon Territory from 1848 to 1853 and then Washington Territory from 1853 to 1863. Like other Great Plains states, Montana was part of a number of other territories before becoming its own: the Missouri Territory (from 1812 to 1821), Indian Country (from 1821 to 1854), the Nebraska Territory (from 1854 to 1861), the Dakota Territory (from 1861 to 1863), and the Idaho Territory (from 1863 to 1864). The Idaho Territory was the first to contain all of modern Montana.

The discovery of gold and the arrival of thousands of treasure-seekers created a situation in which a more deliberate political structure was needed. At the urging of Sidney Edgerton, a Civil War veteran and Chief Justice of the Idaho Territorial Court, Congress created the Montana Territory in 1864. Edgerton was the first territorial governor.

The Montana area was the location of a number of violent clashes between Americans and Native Americans. The most well-known was the June 25–26, 1876, Battle of Little Bighorn, in which a large number of Arapaho, Cheyenne, and Sioux led by Crazy Horse and Sitting Bull defeated and killed General George Armstrong Custer and many of his men. Also in the late 1870s was the Nez Perce War, partly in Montana. Leading his people in that struggle was the famous Chief Joseph, who claimed a victory at the Battle of Big Hole Basin in 1877. As in other states, though, the number of American settlers–and the resources that they brought–eventually outstripped the Native Americans' resources.

The Northern Pacific Railroad arrived in 1883, and settlement accelerated, as did the pace of production. Montana residents applied for statehood in 1884 and had to wait five long years. Montana became the 41st state in the Union on Nov. 8, 1889; the capital was Helena.