Late in 1981, followers of the religious leader Bhagwan Shree Rajneesh purchased the 64,000-acre Big Muddy Ranch, and a period of anxiety and concern began in north Central Oregon. The Bhagwan Shree Rajneesh had developed a large cult of followers beginning in the early 1960s and resulted in a center being established in Poona, India. The religious sect began to rapidly expand, and it was wearing out its welcome in Poona. Followers began looking for a new isolated site to be the center of the Bhagwan’s activities.
The Bhagwan’s newly appointed secretary, Ma Anand Sheela, discovered the large Big Muddy Ranch for sale and purchased the isolated tract of land covering nearly 126 square miles for $5.75 million. The land had been assessed at only $198,000 the previous year. Bhagwan had come to the United States on a temporary visa to receive treatment for his back but came to live on the newly purchased ranch, which became first known as Rancho Rajneesh.
The ranch rapidly began to attract followers of Bhagwan and within three years, the site was transformed from an empty rural property to a thriving city of 7,000 people. A large infrastructure was soon developed to support the rising population, and the community boasted a post office, fire department, police, restaurants, an airstrip, malls, a large reservoir and extensive farming operations. Extensive temporary housing was also created to provide shelter for the thousands flocking to be near Bhagwan. The community was incorporated as a community under protest from organizations such as 1,000 Friends of Oregon.