Chumash Indians were the early inhabitants of the valley. They called it Ojai, which derives from the Ventureño Chumash word awhaý meaning "moon." The area became part of the Rancho Ojai Mexican land grant made to Fernando Tico in 1837, and he established a cattle ranch. Tico sold it in 1853 to prospectors searching for oil, without much success. By 1864, the area was settled.

The town was laid out in 1874 by real estate developer R.G. Surdam and named Nordhoff, California, in honor of the writer Charles Nordhoff. Leading up to and during World War I, American sentiment became increasingly anti-German. Across the United States, German and German-sounding place names were changed. As part of this trend, Nordhoff was renamed Ojai in 1917