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The Confederation League led by such figures as Amor De Cosmos, John Robson, and Robert Beaven had long led the chorus pressing for the colony to join Canada, which had been created out of three British North American colonies in 1867. Several factors motivated this agitation, including the fear of annexation to the United States, the overwhelming debt created by rapid population growth, the need for government-funded services to support this population, and the economic depression caused by the end of the gold rush. With the agreement by the Canadian government to extend the Canadian Pacific Railway to British Columbia and to assume the colony's debt, British Columbia became the sixth province to join Confederation on July 20, 1871. The borders of the province were not completely settled until 1903, however, when the province's territory shrank somewhat after the Alaska Boundary Dispute settled the vague boundary of the Alaska Panhandle.

Population in British Columbia continued to expand as the province's mining, forestry, agriculture, and fishing sectors were developed. Mining activity was particularly notable in the Boundary Country, in the Slocan, in the West Kootenay around Trail, the East Kootenay (the southeast corner of the province), the Fraser Canyon, the Cariboo and elsewhere. Agriculture attracted settlers to the fertile Fraser Valley, and cattle ranchers and later fruit growers came to the drier grasslands of the Thompson River area, the Cariboo, the Chilcotin, and the Okanagan. Forestry drew workers to the lush temperate rain forests of the coast, which was also the locus of a growing fishery.

The completion of the railway in 1885 was a huge boost to the province's economy, facilitating the transportation of the region's considerable resources to the east. The booming logging town of Granville, near the mouth of the Burrard Inlet was selected as the terminus of the railway, prompting the incorporation of the community as Vancouver in 1886. The completion of the Port of Vancouver spurred rapid growth, and in less than fifty years the city surpassed Winnipeg, Manitoba, as the largest in western Canada. The early decades of the province were ones in which issues of land use—specifically, its settlement and development—were paramount. This included expropriation from First Nations people of their land, control over its resources, as well as the ability to trade in some resources (such as the fishery). Establishing a labour force to develop the province was problematic from the start, and British Columbia was the locus of immigration from Europe, China, and Japan. The influx of a non-Caucasian population stimulated resentment from the dominant ethnic groups, resulting in agitation (much of it successful) to restrict the ability of Asian people to immigrate to British Columbia through the imposition of a head tax. This resentment culminated in mob attacks against Chinese and Japanese immigrants in Vancouver in 1887 and 1907. By 1923, almost all Chinese immigration had been blocked except for merchants and investors

Meanwhile, the province continued to grow. In 1914, the last spike of a second transcontinental rail line, the Grand Trunk Pacific, linking north-central British Columbia from the Yellowhead Pass through Prince George to Prince Rupert was driven at Fort Fraser. This opened up the north coast and the Bulkley Valley region to new economic opportunities. What had previously been an almost exclusively fur trade and subsistence economy soon became a locus for forestry, farming, and mining.

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