In 1862, the first white settlers homesteaded south of Lake Sammamish in what they named Squak valley. The name Squak was the white man's pronunciation of the Indian name Is-qu-ah, meaning snake, although others say that the name meant “little stream,” or possibly the sound of the northern crane, a bird common to the valley.
The first documented mention of the name Squak is from 1869 election records. The Squak Post Office opened the following year. William Pickering, Jr., son of Territorial Governor William Pickering, was the town’s first postmaster.
In 1887, the town was platted as Englewood but was not officially incorporated until 1892. At the time, the name Gilman was chosen in honor of Daniel Hunt Gilman, who had established the nearby Seattle Coal and Iron Co. coal mines Gilman was also one of the backers of the Seattle, Lake Shore & Eastern Railroad, which brought much business to the burgeoning community.
Naming the town Gilman created a problem with the post office, as there was already a town named Gilmer in Klickitat County. To stave off any confusion, the Squak Post Office was renamed Olney. This meant that the town had one name, but its post office had another.
The townsfolk must have liked the name Squak. By 1895, most of them continued calling their community that name instead of Gilman. They urged the state legislature to let them rename the town, and it was changed to Issaquah -- a closer approximation of the original Indian name -- on February 2, 1899.