The history of modern Los Altos dates back to 1906, when Paul Shoup, a Southern Pacific Railroad executive, formed the Altos Land Co. with friends. The group purchased 140 acres of land between Palo Alto and Mountain View owned by Sarah Winchester, the widow of the inventor of the Winchester rifle. The company planned a new town to serve the new Southern Pacific Railroad cutoff between Mayfield and Los Gatos and named it "Los Altos" (Spanish for "the heights") because the land was the highest on that cutoff.
In March 1907, at an outdoor land sale sponsored by the Altos Land Company, prospective buyers attended a promotional BBQ and purchased the first town lots. The site of the sale, near today's intersection of Foothill Expressway and Main Street, was the focal point of the new town. The town's name gradually spread informally to identify a much larger unincorporated area served by the Los Altos School District formed in 1910, including what is today Los Altos Hills and portions of other neighboring towns.
This larger community's population exploded after World War II, and on December 1, 1952, an expanded Los Altos became the eleventh city in Santa Clara County. As a result of decreased interest in train travel due to the wide adoption of the automobile, the Southern Pacific Railroad, an essential part of the town's founding, ceased operation here in 1964, and its right-of-way became Foothill Expressway.