The area now called Ballard was settled by the Dxʷdəwʔabš (Duwamish) Tribe after the last glacial period[circular reference]. There were plentiful salmon and clams in the region. The U.S. government code in the CDC (Centers for Disease Control which maintains a list of race and ethnicity for tracking) for this group is American Indian, Puget Sound Salish (Code A01-M43, H71). (There is no "Shilshole" tribe). The Burke Museum has artifacts from the group of Duwamish who lived at Shilshole. The references say that before non-Natives arrived, the group living around Shilshole may have been in decline due to a "great catastrophe". The remaining dozen or fewer families were evicted by non-Natives in the mid-19th century. One source suggests that the decline of the Shilshole dwelling Salish might have been due to raiding from Natives from farther north (Queen Charlotte's Island) and these raids also alarmed non-Native settlers. The last member of the Shilshole native group-HWelch’teed or "Salmon Bay Charlie"-was forcibly removed to allow construction of the Hiram Chittendon Locks
The first European resident, homesteader Ira Wilcox Utter, moved to his claim in 1853. Utter hoped to see a rapid expansion of population but that did not happen, so he sold the land to Thomas Burke, a judge. Thirty-six years later, Judge Burke, together with John Leary and railroader Daniel H. Gilman, formed the West Coast Improvement Company to develop Burke's land holdings in the area as they anticipated the building of the Great Northern Railway along the Salmon Bay coastline on the way to Interbay and central Seattle. The partners also built a spur from Fremont's main line of the Seattle, Lake Shore and Eastern Railway. Today three miles (5 km) of this line, running along Salmon Bay from N.W. 40th Street to the BNSF Railway mainline at N.W. 67th, are operated as the Ballard Terminal Railroad.
During the late 19th century Captain William Rankin Ballard, owner of land adjoining Judge Burke's holdings, joined the partnership with Burke, Leary, and Gilman. Then, in 1887 the partnership was dissolved and the assets divided, but no one wanted the land in Salmon Bay so the partners flipped a coin. Capt. Ballard lost the coin-toss and ended up with the "undesirable" 160-acre (0.65 km2) tract.
The railroad to Seattle ended at Salmon Bay because the railroad company was unwilling to build a trestle to cross the bay. From the stop at "Ballard Junction," (as the terminus was called) passengers could walk across the wagon bridge and continue the journey to Seattle. In addition to gaining notoriety as the end of the railway line, fledgling Ballard benefited economically from the railway because the railroad provided a way to bring supplies into the area and also to export locally manufactured products. Ability to ship products spurred the growth of mills of many types. Ballard's first mill, built in 1888 by Mr. J Sinclair was a lumber mill; the second mill, finished the same year was a shingle mill. After the Great Seattle Fire in 1889 the mills provided opportunities for those who had lost jobs in the fire, which in turn spurred the growth of the settlement as families moved north to work in the mills.