n the 1840’s, Kelso was founded along the banks of the Cowlitz River by a surveyor named Peter Crawford a Scottish surveyor, who, in 1847, took up the first donation land claim on the Lower Cowlitz River. He named the town after his Scottish home. Kelso has a unique historical past. It holds a story of struggle against competition in business and professions, its disasters and its faith in itself to overcome all odds and to expand, grow and progress in every way. The earliest known inhabitants of Kelso were native Americans from the Cowlitz Tribe. The Cowlitz people were separated into the Upper (or Taidnapam) and Lower (or Mountain) Cowlitz tribes.

In its early days, Kelso obtained the nickname "Little Chicago" as it became famous for its large number of Taverns that catered for loggers drinking and gambling.

Kelso operates under both a city charter and Washington state code governing municipalities. As such, it is the only Charter Code city in the state of Washington. The city is governed under the Council/Manager form of government. Kelso's charter specifies that seven council members are elected by the residents, with the council choosing a mayor from within itself every two years.