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Before the arrival of European settlers the area was settled by the Chocheño (also Chochenyo or Chocenyo) subdivision of the Ohlone Native Americans.

With the arrival of Europeans, Castro Valley was part of the land granted to Mission San Jose in 1797. The area Castro Valley now occupies was part of the extensive colony of New Spain in what was the state of Alta California.

Castro Valley is named after Don Guillermo Castro, who was a soldier in the Mexican army and a rancher. Castro Valley was part of the original 28,000 acre (110 km²) land grant given to Castro, called San Lorenzo, and Castro Valley, including Crow Canyon, Cull Canyon, and Palomares Canyons. Castro had a gambling habit and had to sell off portions of his land to pay gambling debts. The last of his holding was sold in a sheriff's sale in 1864 to Atherton (after whom the city of in turn began selling off his portion in smaller parcels. Two gentlemen named Cull (the namesake of Cull Canyon) and Luce bought some 2,400 acres (10 km²) and began running a steam-operated saw mill in Redwood Canyon. The Jensen brothers also bought land from Atherton in 1867.

During the 1940s and 1950s, Castro Valley was known for its chicken ranches. Later it developed into a bedroom community, where workers live and commute to their jobs in the surrounding communities.

Interstate 580, which approaches from the east, makes a turn northward at Castro Valley. Interstate 238, which originates in Castro Valley, connects I-580 to Interstate 880. Inaddition to being served by those two freeways, Castro Valley is served with public transportation by bus system AC Transit, and rapid transit system BART with a station.

As of the censusGR2 of 2000, there were 57,292 people, 21,606 households, and 15,016 families residing in the CDP. The population density was 3,971.6 people per square mile (1,533.0/km²). There were 22,003 housing units at an average density of 1,525.3/sq mi (588.7/km²). The racial makeup of the CDP was 70.84% White, 5.14% Black or African American, 0.59% Native American, 13.54% Asian, 0.44% Pacific Islander, 4.11% from other races, and 5.34% from two or more races. 12.19% of the population was Hispanic or Latino of any race.

There were 21,606 households out of which 32.3% had children under the age of 18 living with them, 54.0% were married couples living together, 11.0% had a female householder with no husband present, and 30.5% were non-families. 23.2% of all households were made up of individuals and 9.3% had someone living alone who was 65 years of age or older. The average household size was 2.58 and the average family size was 3.05.

In the CDP the population was spread out with 23.7% under the age of 18, 6.8% from 18 to 24, 29.8% from 25 to 44, 25.0% from 45 to 64, and 14.7% who were 65 years of age or older. The median age was 39 years. For every 100 females there were 94.6 males. For every 100 females age 18 and over, there were 91.0 males.

The median income for a household in the CDP was $64,874, and the median income for a family was $73,060. Males had a median income of $51,068 versus $38,907 for females. The per capita income for the CDP was $30,454. About 2.7% of families and 4.5% of the population were below the poverty line, including 4.3% of those under age 18 and 4.5% of those age 65 or over.

Notable natives and residents
* Nero Bellum, of the band Psyclon Nine
* Cliff Burton, the late Metallica bassist
* Randy Cook, Oscar winning visual effects artist on Lord of the Rings
* Jack Del Rio, Oakland Raiders head coach
* Nicholas Terry, film Producer / Talent & Literary Manager
* Val Diamond, of Beach Blanket Babylon fame
* Dina Eastwood, news anchor and wife of Clint Eastwood
* Scott Goldberg, Full Clip composer
* Sebastian Janikowski, Oakland Raiders placekicker
* Kevin Maas, former major league baseball player
* Rachel Mow, liberal radio host
* Daniel Selby, actor, singer
* Ed Sprague , former major league baseball player
* Michael Strelo-Smith, singer and quarter-finalist on Season 2 of America's Got Talent
* Garret Dillahunt, Actor; Deadwood (television series)


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