Mexican Hat draws its name from the rock formation that, from some angles, resembles a sombrero which stands along US Highway 163 about two and a half miles northeast of the village of Mexican Hat, Utah. The town is located 20 miles southwest of Bluff, on the San Juan River. It was founded in 1908 by E.L. Goodridge with the establishment of an oil claim. Today, the town is a take-out point for daily San Juan River trips. Friday and Saturday evenings in the summer, musicians often play at the Mexican Hat Lodge. It is a jumping off place for day hikes and rides into Johns Canyon, a visit to Valley of the Gods, and hikes on Cedar Mesa. Lodging, restaurants, tours, and trading posts are available.
In the early years of the twentieth century oil was found seeping from the ground along the San Juan River near what is now the village of Mexican Hat, Utah. This find began a minerals boom which propelled the sleepy area into a frenzy. When the boom ended, Mexican Hat was left on its own and has survived boom bust cycles since then, including the massive uranium boom which greatly affected southeast Utah in the middle years of the twentieth century.