Sausalito is situated near the northern end of the Golden Gate Bridge and developed rapidly as a shipbuilding center in World War II. The city's industrial character gave way in postwar years to a reputation as an artistic enclave, as a picturesque residential community (incorporating large numbers of houseboats),and as a tourist destination. It is adjacent to and largely bounded by, the protected spaces of the Golden Gate National Recreation Area.

During World War II, a major shipyard of the Bechtel Corporation called Marinship was sited along the shoreline of Sausalito. The thousands of laborers who worked here were largely housed in a nearby community constructed for them called Marin City. The soil which supports this area is dredgings from Richardson Bay that were placed during World War II as part of the Marin shipyards for the United States Navy.

Following World War II, a lively waterfront community grew out of the abandoned ship yards. This unique urban village has become a popular visitor destination, known worldwide for its natural beauty, its incomparable arts community, the variety of unique shops and restaurants, and its easy accessibility from San Francisco by bridge and ferry. It is also a prized residential and business location, boasting temperate climate, old world charm, and some of the region's most spectacular views.