Russia began to expand eastward across Siberia toward the Pacific Ocean in search of furs in the late 16th century. In 1724 Czar Peter the Great commissioned Vitus Bering, a Danish navigator, to make an exploratory voyage to determine whether Asia and America were connected. On this voyage, which took place in 1728, Bering found the strait later named for him and concluded that it separated the two areas. (Some historians believe that Semen Dezhnev, a Russian explorer, reached the strait before Bering—as early as 1648—but that his discovery went virtually unnoticed.)

On his second expedition, Bering discovered the Alaskan mainland in July, 1741. He died during the severe winter that followed, but the survivors returned to Russia with samples of the valuable furs to be found in the newly discovered land. The search for furs drew large numbers of Russian traders and hunters to Alaska.

Russian activity in Alaska aroused the interest of other countries. In 1775 Spanish explorers surveyed the coast of Alaska. Captain James Cook of Great Britain sailed along the coast in 1778, during his search for a northwest passage linking the Atlantic and Pacific. In 1786 a French expedition landed in Alaska. It was the Russians, however, who occupied Alaska. For over a hundred years after Bering's discovery, they exploited the coastal resources, nearly depleting Alaska of furs and enslaving or slaughtering the Aleuts.

The first permanent Russian settlement was founded on Kodiak Island in 1784. In 1786 Gerasim Pribilof discovered a group of islands that proved to be important breeding grounds for fur-bearing seals. A contract granting exclusive fur-trading rights in Alaska for 20 years was given to the Russian-American Company by Czar Paul in 1799.

Under the able but autocratic rule of Aleksandr Baranov, the company prospered. In 1804 a capital was established at Sitka. A trading post was built as far south as California, at Fort Ross, in 1812 (vacated in 1841). After Baranov's departure in 1818, the company's prosperity declined, and Russia was eventually forced to grant trading privileges in Alaska to the United States (1824) and Great Britain (1825).

Trade became less and less profitable for the Russians. As early as 1857, Russia offered to sell Alaska to the United States. Negotiations were unsuccessful until after the American Civil War. On March 30, 1867, Secretary of State William H. Seward signed a treaty purchasing Alaska for $7,200,000, or about two cents an acre (about $5 per square kilometer). The purchase was generally unpopular in the United States, and Alaska was called “Seward's Folly” and “Seward's Icebox.”