James Marshall was working on a saw mill for John Sutter, when he saw something shining in the river.
James and John went to test the metal, and it was gold! The word got out quickly about their finding.
Not many people lived in California, but by 1849, thousands and thousands of people migrated there in search of gold.
These people were known as 49ers. They came either across the ocean or along the California Trail. Some would dig to try and find their gold but most would pan. Panning was sinking a pan into water, and then shaking the dirt away to reveal any gold.
For the most part, the gold rush was a huge let down. Most people had to go home empty handed because gold is so scarce.