Columbia City is on the west/left bank of the Columbia River about thirty miles northwest of Portland and two miles north of St. Helens, the seat of Columbia County. A riverfront community of about two thousand residents, Columbia City is known for its pioneer museum complex, more than eighteen acres of parks, and Columbia City Days, an annual summer celebration that helps fund the community library.

Brothers Joseph and Jacob Caples, overland immigrants from Ohio, founded Columbia City in 1867. Joseph, a widower, had arrived in 1844 with his three children, Charles, Hezikiah, and Joanna, and Jacob had arrived alone in 1850. They filed adjoining land claims on the Columbia River, about twenty-five river miles downriver from Fort Vancouver. Most of that land is now within the city limits of present-day Columbia City. For generations, Chinookan people had lived in the area in villages along the river, and they appear to have had friendly relations with the newcomers. They told the Caples about a seasonal fishing camp on Joseph's claim, which they called Kumahi (the camp was apparently no longer active).

In 1850, Charles G. Caples, Joseph Caples's son, graduated from Tualatin Academy (now Pacific University), which had been established in the lower Willamette Valley the year before. He filed a land claim next to his father and began to study medicine under the tutelage of Portland Doctor J. S. Giltner. In 1857, Charles became the first doctor of medicine in Columbia County. A post office was established in Columbia City in 1870, the same year that Charles built a house near the Columbia River. The house is now part of the Caples House Museum complex and is on the National Register of Historic Places.

Joseph Caples deeded land to his daughter Joanna, and she and her husband George Maxwell built a house on the riverbank in 1871. The Maxwells lived upstairs from their mercantile store, which carried farm and household items, groceries, and clothes. In 1870, the Maxwells had a wharf built for the first landing in Columbia City, where steamships stopped for passengers, freight, and wood for fuel. The Maxwells’ house is now known as the McVey house, for Elijah McVey, who later owned the house and was a postmaster in the early 1900s. In 1872, Charles Caples and Joanna Maxwell opened the Columbia City Academy, the first school in the town.

The Northern Pacific Railroad finished laying tracks from Portland through Columbia City in 1883. The Northern Pacific planned to build a landing for ferryboats to transport trains across the Columbia to Kalama, Washington, about eight miles downriver, where they would connect with the company line north to Tacoma. But the Columbia City site was scrapped in favor of an Oregon landing downriver at Hunter's Point, where the ferry Tacoma began operating in 1884. In 1890, the ferry landing was moved two miles farther downriver to Goble, about two miles across the river from Kalama. Use of the Goble landing for a train crossing was discontinued in 1908 when a railway bridge was completed across the Columbia at Vancouver, Washington. In the twenty-first century, the Portland & Western Railroad operates the Portland-to-Astoria line, which parallels Highway 30.

Until World War I, the economy of Columbia City was driven by farming, selling cordwood to steamships, operating sawmills, and logging. In 1917, with the beginning of the war, things changed in the small town with the arrival of Matts and Edward Sommarstrom, Swedish shipbuilders who had emigrated to the United States from Finland. The two brothers bought riverfront property in Columbia City and established the Sommarstrom Shipbuilding Company, which in December 1917 received government contracts of $1.12 million to build hulls for four wooden cargo steamships. The following May, the 286-foot-long Musketo was the first of seven cargo hulls launched at the shipyard. The hulls were towed to Portland for the installation of boilers, engines, and components. At its peak, Sommarstrom Shipbuilding employed about six hundred workers. The company closed in 1920.

Columbia City was incorporated in 1926. The same year, the Columbia City Community Club, organized in 1925 by more than seventy local women, raised funds for a hall where they could meet and work for the improvement of the city and "every good cause." The hall was donated to the city and is still used for community events.

The Lower Columbia River Highway, now Highway 30, was built between 1917-1920, generally following the route of the railroad tracks. The road, which is a continutation of the Columbia River Highway running east/west through the gorge, bisects Columbia City and has become a well-traveled route between Portland and Astoria. The town's deepwater port was a frequent stop during the early and mid-twentieth century, and the port authority office for the Port of Columbia County (formerly the Port of St. Helens, created in 1940) is in Columbia City. In 1965, Shell Chemical Co. purchased land that once served as the Columbia County Fairgrounds, less than a mile from the town limits. The company built a nitrogen-based fertilizer plant, which was acquired by Dyson Nobel in 2004 and still operates. In 1998, residents of Columbia City and St. Helens requested DEQ monitoring of ground and air pollution, which prompted a detailed site assessment by the state.

By 1992, city planners reported that most Columbia City workers were employed outside the city. It had become a residential community without a strong employment base, a status it maintains in the twenty-first century.