The city of Monticello rests at the foot of Blue Mountain on the Great Sage Plain of southeastern Utah. Local springs east and west of its present location offered water to passersby, who gave them such names as Piute Springs, Soldier's Spring, and Vega (Spanish for "fertile plain") Creek.

In March 1886 Francis A. Hammond, LDS stake president of San Juan County, sent an exploration party from Bluff to determine likely sites for towns close to the mountain and its water. The south and north forks of Montezuma Canyon provided real possibilities, yet the general region was already utilized by Edmund and Harold Carlisles' Kansas and New Mexico Cattle and Land Company, located a few miles north of Monticello, and the L.C. outfit, headquartered on the South Fork of Montezuma Creek. Undaunted, Hammond called Frederic I. Jones and four other men to start planting crops, laying out a townsite, and surveying an irrigation ditch. By the first part of July 1887 the men had their tasks well under way and had joined in a conflict with the cowboys of the Carlisle outfit that would continue for approximately the next eight years. Warning shots, heated disputes, and legal wrangling were all part of this tension as each group tried to control access to the area's water. Homesites established at Verdure, on the South Fork of Montezuma Creek, were not free of conflict either, with cowboys as well as Ute Indians adding to the stress.