As the Union Pacific Railroad was pushing west to link up with the Central Pacific Railroad, as part of the First Transcontinental Railroad, they sent logging crews into the Snowy Range, in the Medicine Bow Mountains, to cut down timber (mainly Lodgepole Pine) for railroad ties. A work camp was built on the site of the town. After they had completed most of their work and the workers started having conflicts with area Indians, the crews left the area. After the area was opened to homesteaders a few ranchers returned to the area.
Men working for I. P. Lambing (superintendent at the mine) of Golden, Colorado and Colonel Stephen W. Downey (a lawyer and president of what would become Centennial Gold Mining Company) of Laramie, Wyoming, discovered gold on what would become Centennial Ridge on Centennial Mountain in 1875. As miners and prospectors started coming to the area, to work the Centennial Mine (also called the Downey Load and Centennial Vein), they reestablished a community on the old work camp site in 1876 and named the town Centennial in honor of the 100th anniversary of the signing of the Declaration of Independence and founding of the United States. Most of the gold was stripped from the mines by 1877, but the town was now established and merchants who came to serve the miners stayed to serve the nearby ranchers.
On the west side of Centennial Ridge a copper claim was discovered by Jacob Schnitzler in 1896.
Gold had people coming to the area again in 1902, and again in 1923-1924, but no significant amount was ever found. Loggers returned to the area in 1905 to cut timber for a coal mine near Coalmont in Jackson County, Colorado. Acme Consolidated Gold & Mining Company, headed by Isaac Van Horn, bought up timber land around the town, the townsite (Interstate Town Site Company), opened a sawmill, a planing mill and lumber yard, and opened a newspaper, the Centennial Post. The partners in Acme Consolidated Gold & Mining Company, Van Horn, Fred A. Miller, and Edward R. Miller, also formed the Laramie, Hahns Peak and Pacific Railway to transport the coal out to eastern markets. The railroad, originating in Laramie, reached Centennial on June 17, 1907 (it would finally reach Coalmont in 1911). That same year a bank was founded
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