One of the more successful American utopian communal societies in the nineteenth century was founded on the Pudding River in Marion County in 1856. Named for a daughter of the leader of the Christian communal group, the Aurora Colony (or Aurora Mills, as it was also known) grew to a population of more than 600 individuals who followed the basic Christian beliefs of Wilhelm Keil (1812-1877). The Aurora Colony became known for its orchards, food, music, textiles, furniture, and other crafts as well as its communal lifestyle and German traditions.

Keil was a Prussian-born tailor who also practiced apothecary and became a preacher and leader of souls. Arriving in the United States with his wife Louisa in the mid-1830s, at a peak of a religious revival, Keil sought his calling among several Protestant groups. Ultimately, he denounced all organized religion to establish a primitive Christian group devoted to the Golden Rule. After living in New York City and Pittsburgh for several years, in 1844 he sent a party west to find a suitable location to establish a colony where his followers could put into practice their common beliefs. They selected a site in Shelby County, Missouri, to establish the Bethel Colony, where Keil led nearly eight hundred individuals at its peak, with several satellite communities.

In 1853, Keil sought a new location for the colony and sent a scouting party to the Pacific Northwest. The scout group chose a location on Willapa Bay in Washington Territory, and in 1855 Keil led a party across the Oregon Trail to the new site. At the head of the wagon trail was a hearse carrying the body of Keil's oldest son, Willie, who had died shortly before the group left for the Northwest.

Keil was dissatisfied with the Willapa location and, despite burying his son there, chose to move south to Portland with many of his followers. In 1856, he purchased a donation land claim on the Pudding River, and the Aurora Colony became the new home for his followers. Bethel continued as part of the communal experiment under Keil's indirect leadership. In 1862, a smallpox epidemic struck the colony, and Keil lost four more of his children, including Aurora, after whom he named the colony.

At its peak, the population of the Aurora Colony grew to 600 from the 250 who left Bethel to follow Keil west. Aurora was slow to develop until 1863, when a large contingent arrived from Bethel. The group included carpenters and craftsmen who would lead the rapid build-up of the colony. Keil continued to serve as leader of the community, but in 1866 he drew up an agreement that would transfer control of the colony to a group of trustees. The trustees wrote "Articles of Agreement" that served as the constitution for the colony.

Keil was instrumental in bringing the Oregon & California Railway line to Aurora in 1870. The railroad connected Aurora with other cities and brought more business to the Colony Hotel, as well as spreading the word about the offerings at Aurora. The Aurora Colony Band became famous on the West Coast and traveled to many locations to play music, much of it written by Aurora musicians.

In the early 1870s, after the death of his only remaining daughter, Keil began to transfer ownership of several parcels of colony land to individual households, with the intent to transfer more later. Keil died suddenly on December 30, 1877, without having made any further transfers. The trustees assumed leadership of Aurora and Bethel and decided to dissolve the two colonies, a process that took several years and was overseen by Judge Matthew P. Deady. The final settlement of the dissolution was declared on January 22, 1883.

Ten years after the dissolution of the Aurora Colony, the City of Aurora was incorporated. Many colony descendants continued to live in the area, and several colony buildings survived, although the Colony Church, the Gross Haus (Keil's home), and the Colony Hotel were among those lost to fire and demolition. In 1963, a group of descendants and other interested individuals formed the Aurora Colony Historical Society to preserve the buildings and artifacts of the Colony. In 1966, the Old Aurora Colony Museum was dedicated, and in 1974 twenty sites in Aurora were placed on the National Register of Historical Places. It was the first historic district of its kind in the state.