The government agency of Mountain House was formed in 1996. The Mountain House community reached 1,000 registered voters, which prompted a vote for independence in the Spring of 2008 and an independent local Board of Directors in the Fall of 2008. The MHCSD Board of Directors set policies, ordinances, and regulations to benefit Mountain House residents.

The City of Mountain House is the 483rd incorporated City admitted into the State of California in July 2024.

Mountain House is self-governing and utilizes a Council/City Manager to govern the City. In using this form of government, the City Council, as the elected body; adopts legislation, sets policy, determines issues, and establishes the operating budget for the City. The City Manager is charged with the duty of implementing City Council policy and laws as the administering head of the government.

The City Council appoints volunteers to serve on various advisory boards, commission and committees. Each Council member and the Mayor, may serve as representatives on intergovernmental and regional boards, commissions and committees as part of their elected capacity.

Members of the community are appointed to serve on a variety of commissions and committees to focus on key issues and to then provide feedback, recommendations and support to the council on those issues.

The Mountain House area was originally inhabited by the American Indian Cholbon tribelet of the Northern Valley Yokuts. The tribelet’s territory extended westward along Old River to just west of Bethany. In the late 18th century, the Spanish explorers led by Juan Bautista de Anza traveled from the San Francisco Bay to the Sacramento-San Joaquin Delta. The Spanish never settled in this region, and the land was mostly used for agriculture and stopping off points for transportation and trade.

The name Mountain House originates from the Gold Rush era. When miners traveled from San Francisco to the Sierra foothills, they often rested midway at a house called "Mountain House" at the bottom of a range of hills. The first Mountain House structure took the form of a blue tent and was built in 1849 by Thomas Goodall. With the help of American Indians, Goodall built an adobe house on the site where Mountain House became a rest stop for miners, stockmen, rancheros, and immigrants. Simon Zimmerman purchased the stop, and through his hard work, Mountain House became a famous way station on the road to Stockton.

In the mid-1850s, Mohr’s Landing developed around Old River to support commerce and trade. Unfortunately, in the early 1860s, the Old River's flooding destroyed Mohr’s Landing, and a regional farmer, Eric Wicklund, built a new town near the Mountain House site. The town of Wicklund became the transportation and trade center for the area. During the 1870s, the Central Pacific Railroad's arrival allowed faster transportation of goods, and Wicklund’s commerce faded. In 1878 the first train ran through Bethany Railroad Station, and Bethany became a new center for trade. To accommodate growth, the Byron-Bethany Irrigation District was formed in 1916 to transport water, which eased dry farming dependency. Through the 1920s, Bethany grew to include a church, blacksmith shop, general store, bar, dance hall, and post office. During this time, the Mountain House School was built in the foothills of the region. In 1940 the last remaining structure of Bethany, the Bethany Post Office, was torn down. Since then, the land in the Mountain House area has primarily been used for agriculture.