The first post office opened in 1870 as "Saucelito" and changed its name to the present spelling in 1887.
In the 1870s, the North Pacific Coast Railroad (NPC) extended its tracks southward to a new terminus in Sausalito, where a rail yard and ferry to San Francisco were established. The NPC was acquired by the North Shore Railroad in 1902, which in turn was absorbed in 1907 by the Southern Pacific affiliate, the Northwestern Pacific.
By 1926, a major auto ferry across the Golden Gate was established, running to the Hyde Street Pier in San Francisco. This ferry was an integral part of old U.S. Highway 101, and a large influx of automobile traffic, often parked or idling in long queues, became a dominant characteristic of the town. Northwestern Pacific commuter train service also expanded to serve the increased traffic volume, and Sausalito became known primarily as a transportation hub.
This era came to an end in May 1937, with the opening of the Golden Gate Bridge. The bridge made large-scale ferry operations redundant, and since the new route of Highway 101 bypassed Sausalito entirely, in-town traffic was quickly reduced to a trickle. Car ferry service ended in March 1941 (passenger ferry service, however, continues to
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