Few American settlers had moved into the region of present-day Kentucky prior to the completion of the western portion of the border survey between Virginia and North Carolina in 1748. When the French and Indian War (Seven Years War) ended, the Ohio River was designated as the boundary between settlers and native inhabitants. Kentucky was under the jurisdiction of Augusta County, Virginia. Fincastle County, Virginia, was organized in 1772 to include all of present-day Kentucky with Harrodsburg designated the county seat. The following year the McAfee brothers and others surveyed land along the Salt River. In 1774, under James Harrod, Harrodsburg was founded as the first permanent English settlement in Kentucky by a group that arrived via the Ohio River.

That same year Richard Henderson purchased from the Native Americans all land lying between the Ohio, Kentucky, and Cumberland rivers for his Transylvania Company. John Finley's stories of Kentucky land precipitated Daniel Boone's subsequent exploration. Boone blazed the trail from the Cumberland Gap (at the junction of present-day Virginia, Kentucky, and Tennessee) to the interior. This path between the Cumberland Gap and central Kentucky became known, through the Transylvania Company's publicity, as the Wilderness Road. In 1775 Boonesborough was established as the headquarters of the Transylvania Company.

During the Revolutionary War the settlements in Kentucky were virtually ignored by the Virginia government. Troubles with native tribes, lack of military assistance, and isolation from the eastern portion of Virginia precipitated agitation for Kentucky's own statehood. Between 1784 and 1790, nine conventions met at Danville demanding separation from Virginia, but none of these were successful in gaining a division.
The Commonwealth of Kentucky was admitted to the Union as the fifteenth state on 1 June 1792 after the first constitution was drafted on 3 April of that year. Established as a commonwealth state, its first capital was at Danville. Early settlers included Revolutionary War veterans staking claim to bounty-land grants. They were joined by Scots-Irish, German, and English individuals and families from Virginia, Maryland, North Carolina, Pennsylvania, and Tennessee.

Ideology over the slave issue divided the populace before and during the Civil War. Many large land owners supported slavery, but the small farmers and mountain families did not. Officially, Kentucky, the birthplace of Abraham Lincoln, was neutral during the Civil War only until September 1861 when it actively began support of the Union, even though the Confederate States continued to act as if Kentucky were one of theirs.
Following the Civil War, tobacco and coal became leading commodities in Kentucky's economy. Kentucky's bluegrass pastures have produced an exceptional number of thoroughbred horses, leading to worldwide recognition in horse racing. Fort Knox, originally Camp Knox, began as a permanent military post and later became an official U.S. gold depository. In the twentieth century it has been a major training center for military recruits.

Genealogical research in the state is aided by excellent research facilities and printed materials on Kentucky's early settlement.