Hispanic settlers had occupied lands within the Mora Valley without legal title ever since Governor de Anza had made peace with the Comanches in the late 18th century opening up the east side of the Sangre de Cristo Mountains for settlement. However, Mora was formally founded as a farming community in 1835 The settlers came from primarily from Las Trampas, but also from Picuris and Embudo. The 76 families each received a strip of land by grant of Governor Albino Perez. Despite fanciful stories about fur trappers, scattered bones and subsistence on mulberries (mora means mulberry in Spanish), the fact is that the valley, the river and the town took their name from the family name "Mora" of several of the settler families.
In 1843, there was a raid on the town by Texas freebooters under Colonel Charles A. Warfield claiming that the people in Mora had purchased stolen beef from the Comanches. The Texans killed five men and took eighteen women and children captive as well as 75 horses. The people of the Mora Valley convened a posse, overtook the Texans, and sent them back to Texas on foot.
In 1847, after the Battle of Mora, Federal troops killed stragglers, looted and burned the town, the nearby ranches, and all the crops. The town was essentially destroyed and was rebuilt by the insurgents who had fled at the news of artillery coming up the valley. After 1851 when Fort Union was established on the Santa Fe Trail, these same farmers sold their crops to the fort.