The river had a year-round flow until the 1700s. By the 20th century the Santa Fe River was a seasonal waterway. As of 2007, the river was recognized as the most endangered river in the United States, according to the conservation group American Rivers.

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Don Juan de Oñate led the first Spanish effort to colonize the region in 1598, establishing Santa Fe de Nuevo México as a province of New Spain. Under Juan de Oñate and his son, the capital of the province was the settlement of San Juan de los Caballeros north of Santa Fe near modern Ohkay Owingeh Pueblo. Juan de Oñate was banished and exiled from New Mexico by the Spanish, after his rule was deemed cruel towards the indigenous population. New Mexico's second Spanish governor, Don Pedro de Peralta, however, founded a new city at the foot of the Sangre de Cristo Mountains in 1607, which he called La Villa Real de la Santa Fe de San Francisco de Asís, the Royal Town of the Holy Faith of Saint Francis of Assisi. In 1610, he designated it as the capital of the province, which it has almost constantly remained, making it the oldest state capital in the United States.

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Lack of Native American representation within the province of Santa Fe de Nuevo México, New Spain (current New Mexico's early government) led to the 1680 Pueblo Revolt, when groups of different Native Pueblo peoples were successful in driving the Spaniards out of New Mexico to El Paso, the Pueblo continued running New Mexico proper from the Palace of the Governors in Santa Fe from 1680 to 1692. The territory was reconquered in 1692 by Don Diego de Vargas through the war campaign called the "Bloodless Reconquest" which was criticized as violent even at the time, it was actually the following governor Francisco Cuervo y Valdez that truly started to broker peace, such as the founding of Albuquerque, to guarantee better representation and trade access for Pueblos in New Mexico's government. Other governors of New Mexico, such as Tomás Vélez Cachupin, continued to be better known for their more forward thinking work with the indigenous population of New Mexico. Santa Fe was Spain's provincial seat at outbreak of the Mexican War of Independence in 1810. It was considered important to fur traders based in present-day Saint Louis, Missouri. When the area was still under Spanish rule, the Chouteau brothers of Saint Louis gained a monopoly on the fur trade, before the United States acquired Missouri under the Louisiana Purchase of 1803. The fur trade contributed to the wealth of Saint Louis. The city's status as the capital of the Mexican territory of Santa Fe de Nuevo México was formalized in the 1824 Constitution after Mexico achieved independence from Spain.