Steilacoom had served as Pierce County's seat of government since the Oregon Territorial legislature established the county in 1852. At that time Steilacoom was by far the largest settlement in the new county and was the natural choice for county seat. The site was the traditional home of the Steilacoom Tribe. Nearby, at Nisqually, the Hudson's Bay Company had operated a trading post since 1833. The U.S. Army established Fort Steilacoom in 1849 and in 1850, Captain Lafayette Balch sited his land claim next to the fort and founded Port Steilacoom.
Tacoma City was platted on Commencement Bay in 1868. In 1873 the Northern Pacific Railroad chose Commencement Bay as the rail line's western terminus. The Northern Pacific-controlled Tacoma Land Company established New Tacoma south of Tacoma City in 1874. The promise of the railroad fostered steady growth and by 1880 the two Tacomas boasted nearly 1,100 residents to Steilacoom's 574. Prominent Tacomans began agitating for the removal of the county seat.
Theodore Hosmer, at the time serving as manager of the Tacoma Land Company, pledged that the company would donate four lots on which a courthouse could be built in the event that Tacoma secured the county seat. The lots were valued at about $2,000 at the time. Hosmer also promised that county offices could occupy the Tacoma Land Company premises without paying rent for one year while the courthouse was being built.
Although it was clearly eclipsing Steilacoom as Pierce County's preeminent town, New Tacoma was by no means yet metropolitan. Even as substantial buildings rose and warehouses and docks beckoned maritime traffic, the streets were as yet unpaved and were dotted with stumps. Bears and wolves roamed the outskirts of the settlement, devouring fawns and lambs with little to hinder them.
Nevertheless, the New Tacoma's future was clearly on the ascent and the town's bid to become Pierce County's seat was successful.
The new county commissioners elected on November 2, 1880, were William B. Blackwell, W. C. Gibbs, and George Byrd. They met in New Tacoma for the first time on November 15, 1880, and set about arranging for their rent-free offices, temporary courthouse, and jury room.
Not until June 8, 1882, did the Pierce County commissioners call for bids for construction of the new county courthouse. On June 29, 1882, W. H. Merrill was awarded the construction contract with a bid of $6,850. Joseph Sherwin drew the courthouse plans. The building was constructed at 920 Broadway in Tacoma and served Pierce County until the construction of a new courthouse at 1012 S. G Street in 1892. This courthouse was in turn replaced in 1959.
In late 1883, Tacoma City and New Tacoma merged to form the city of Tacoma.