When Virginia City, the county seat of Madison County, was incorporated early in 1864, it was then part of the Territory of Idaho. When Montana Territory was formed a short time later Madison County became one of its eight original counties.

The new Montana Territorial Legislature named Virginia City as the territorial capital in the Legislature Act of 1865, moving the seat of government from Bannack.

Virginia City lost the honor of being Territorial capital to Helena in 1875, but the town remains. Tourism has replaced mining, and she has retained the seat of county government.