San Luis Obispo (1990 pop., 41,958), the seat of San Luis Obispo County in southwestern California, is located at the base of Santa Lucia Mountain on San Luis Obispo Creek. It is famed for its Spanish mission, San Luis Obispo de Tolosa, which was founded by Father Junípero Serra in 1772 and named for Saint Louis, bishop of Toulouse (1274–97). One of the most elegant of the old California missions, it is still used as a Catholic parish church. The economy of the city is largely based on oil that is pumped and refined locally and shipped through Port San Luis on the Pacific Coast. Light manufacturing, wineries, printing, and tourism are also important.

The city, founded in 1850, developed as a farming community around the mission but grew rapidly after 1894 when the Southern Pacific Railroad arrived. Educational institutions include California Polytechnic State University, San Luis Obispo College (1901), and Cuesta College (1963). Situated about halfway between San Francisco and Los Angeles, San Luis Obispo was a natural stopover for motorists traveling between the two cities in the days before the freeways. In 1925 the Milestone Motel opened there; the first motel in the country, it survives as the Motel Inn.