Holy City was founded in 1919 by cult-leader William E. Riker and about thirty of his followers. Calling his ideology "The Perfect Christian Divine Way", Riker preached celibacy, temperance, white supremacy, and segregation of the races and sexes.
Riker bought the 142 acres (57 ha) that became Holy City. Here he offered tourist services including a restaurant andgas station. The town was incorporated in 1926. A radio station was built in 1924 and went on the air on July 7 of that year under the call letters KFQU. The station went off the air in December 1931, and had its license renewal denied on January 11, 1932, due to "irregularities." The religious community had no church; services were held in Riker's home. Holy City expanded to three hundred residents during the 1930s. The town began to decline in the 1940s. With the construction of State Route 17, Holy City was no longer on the main route through the mountains. With the end of the Depression, many of Riker's followers were able to find work elsewhere. The town was disincorporated in 1959, and Riker lost control of the property. Several of the buildings mysteriously burned down shortly afterwards.