The winery was founded in 1852 by Éthienne Thée, a French immigrant who named it after a nearby mercury mine. It is one of the oldest wineries in California and is described as the oldest on its own website. The original location was south of San José between Los Gatos and Almaden. Due to its historical significance, it is registered as "California Historical Landmark 505". After the merger with Madrone Vineyards, Thée's son-in-law Charles Lefranc (1825-1887) took over the management of the vineyard. He planted the first European vines at the foot of the Santa Cruz Mountains.

At the beginning of the 1880s, Paul Masson (1859-1940), who later became famous as the "Champagne King of California", joined the company as cellar master. After the death of Charles Lefranc, Masson married his daughter Louise. After a short-lived partnership with his brother-in-law Henry Lefranc, he founded his own winery "Paul Masson Champagne Company" in Almaden. After the death of his brother-in-law in 1909, he also managed Almaden Vineyards until it was sold to Charles M. Jones in 1930. After Prohibition (1920-1933), Almaden produced the first popular rosé in the USA. The old winery was destroyed by fire in 1989.
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