Prior to 1895, the only way to access the area was by stagecoach or wagon over tortuous trails or by sailing vessels and early steamships. In anticipation of the proposed Southern Pacific Railroad route along the coast, several prominent ranchers and developers began plans for a new city on the S.P. mainline. In 1893, R.E. Jack and E. W. Steele filed the first map of the town of Oceano. 

As was customary at the time, the right of way was given to Southern Pacific with the stipulation that a depot be constructed and maintained for freight and passenger service. So when the rails reached Oceano in 1896, a handsome building was constructed on the site provided for on the map labeled "Southern Pacific Depot Grounds" and a wave of prosperity was to sweep over Oceano. The area now enjoyed overnight passenger, freight and telegraph service, all of which passed through and around the Oceano Depot. 

The first depot met with disaster when an accidental fire in the fall of 1903 reduced the entire station to a pile of ashes S.P. immediately set up service in a converted boxcar, shipped in an almost identical surplus station from the Bay area in pieces, swept the ashes off the original foundation, and in March 1904, service was resumed in the station we know today. 

The initial success of the Depot and the community reached its peak around 1920 and from that point on, the growing popularity of the automobile, a more efficient trucking industry and of course, the “Great Depression” all combined to erode the importance of the Oceano station. Passenger service was discontinued in the 1950’s and the suspension of mail and telegraph service followed soon after. Shipping of celery and other vegetables from the Arroyo Grande Valley kept the freight office going at a busy rate well into the 1960’s, but competition from the trucking industry and changes in crop production and packing methods finally brought about the closing of the Oceano depot in 1973. 

It was then acquired by the Phelan-Taylor Packing Company who used the warehouse portion for an experimental packing facility. When this venture ended, the station stood alone and abandoned alongside the S.P. Tracks slated for demolition. 

When the Oceano Improvement Association learned of the scheduled demolition it embarked on a volunteer project to save it for use as a museum and community hall. A bill of sale for the traditional sum of One Dollar was given to the group by Mr. Edwin Taylor, and an agreement was reached with Southern Pacific to leave the station on its original location temporarily until a more suitable site could be found. County Supervisor Howard Mankins helped secure a long term lease on County owned property at the present site, and he was also successful in obtaining a Federal revenue sharing grant which enabled the organization to move the building, acquire some additional private land and begin restoration efforts.