During the years of the Civil War and its aftermath, internal conflicts were the order of the day within the state. By 1861, good Willamette Valley land was becoming scarce, so many farmers moved east of the Cascades to farm wheat. They ran into violent confrontations with Native Americans over land. Between 1862 and 1934, the Homestead Act land giveaways helped fuel these fires of resentment. Miners encroaching on Native American territory around the southern coast eventually flared into the bloody Rogue River Wars, which would lead to the destruction of most of the native peoples of the coast.

In the 1870s, cattlemen came to eastern Oregon, followed by sheep ranchers, and the two groups fought for dominance of the range. Just when it appeared that eastern Oregon land was ripe for agricultural promoters and community planners, the bottom fell out. Overproduction of wheat, uncertain markets, and two severe winters were the culprits. In the early 20th century a population influx created further problems by draining the water table. Thus the glory that was gold, grass, and grain east of the Cascades was short-lived. Many eastern Oregon towns grew up and flourished for a decade, only to fall back into desert, leaving no trace of their existence.

Unlike the downturn east of the Cascades, boom times were ahead for the rest of the state as the 20th century approached. In the 1860s and 1870s, Jacksonville in the south became the commercial counterpart to Portland, owing to its proximity to the Rogue Valley and south coast goldfields as well as the California border. During this period, transportation links began to consolidate, in part due to the efforts of stagecoach magnate Ben Holladay. The first stagecoach, steamship, and rail lines moved south from the Columbia River into the Willamette Valley; by the 1880s, Portland was joined to San Francisco and to the east by railroad. Henry Villard was the prime mover in this effort, eventually dominating all commerce in the Northwest by channeling freight and passengers through Portland and along the Columbia.

In 1900, Union Pacific magnate James J. Hill picked up where Villard left off. By selling 900,000 acres of timberland to lumber baron Frederic Weyerhaeuser at $6 per acre (with the stipulation that Weyerhaeuser build his mills close to Union Pacific tracks), he hitched the destiny of the region to the iron horse.