This chapter provides a general history of Sao Paulo from 1554 until the mid-nineteenth century with emphasis on the evolution of political institutions and interest groups, the impact of external factors such as the discovery of gold and changes in the international market, and the development of a commercial infrastructure and trade. The transformation of the economy of the community of Sao Paulo from a subsistence to an exchange basis was to a large extent dependent upon the construction of a commercial infrastructure which would resolve the geographic barriers to trade. The expansion of the Sao Paulo export trade was continuous after the completion of the road to Cubatao, first with the development of sugar production, and later with coffee. Gold was an important source of local wealth in Sao Paulo in the eighteenth century. Just as significant, however, was the integrating effect which the mining economy had on the previously autonomous subsistence economies of southern Brazil. Isolation and a sparse population accounted for the development of a largely self-sufficient subsistence economy.