The Kansas Territory was opened to settlement in May of 1854. According to the concept of "popular sovereignty," settlers could decide whether to admit their territory as a slave or free state. Soon after the territory was opened, abolitionists from New England rushed to the area in an effort to keep the territory from becoming pro-slavery. It is said that Lawrence is one of the few cities founded purely for political reasons. The group named the town after the financier of their expedition, Amos Lawrence.

Lawrence also acted as an important stop on the Underground Railroad, helping escaped slaves reach freedom safely. Anti-slavery Jayhawkers from Kansas frequently clashed with pro-slavery Bushwhackers from the neighboring slave state of Missouri. The conflict grew in 1861 after war broke out and Kansas chose to become a free state. Lawrence, the headquarters of the Jayhawkers, was the scene of several bloody encounters.

The worst of these occurred in 1863, when William Quantrill assembled a group of 400 men in Missouri and rode into Lawrence. Early on August 21, the raiders entered the city "to burn every house and kill every man." The raiders sacked the town for four hours before escaping to the south.
The resilient citizens of Lawrence banded together to bury their dead and rebuild their city. Many of the homes and buildings constructed after the raid are still in use today. Lawrence's motto, "From Ashes to Immortality," is inspired by the efforts of these settlers.

Even before the Kansas Territory was opened to settlers, it was well known to travelers of both the Oregon and Santa Fe Trails. Lawrence is located between the two trails, which run through Lawrence and Douglas County. Traders headed west along the wagon trails beginning in the 1820s. Settlers also followed the Oregon Trail to take up free land in Oregon. For these later travelers, Lawrence offered important services and supplies.

After the Civil War ended in 1865, railroads rapidly pushed across the Great Plains and wagon trails became obsolete. Although most physical traces of the trails have been erased, a few wagon ruts are still visible around Lawrence.