Stories of gold in the San Juan River brought a frenzy of prospectors in 1892-93, but the mining proved mostly a bust. Oil, first struck by drillers in 1908, has brought mostly modest profits. By 1911 there were 27 drilling rigs in the field, a small town had sprung into existence at Goodridge (now Mexican Hat), and the first bridge was constructed over the San Juan River. However, most of the wells produced only a little oil and gas, and many were "dry holes." None produced oil in commercial quantities. The uranium mill across the river at Halchita gave a boost to the economy from 1956 until it closed in 1965. Today it serves as a modest trade and tourist center.

Mexican Hat Butte, 2 miles north of town, is a cone shaped mound of red shale nearly 400 ft high, with an eroded rock formation on the summit, which is said to resemble a gigantic Mexican sombrero on its crown. The brim of the "hat" is 62 ft across. The Navajo call it Ch'ah lizhin, or Black Hat.

The Raplee Anticline is located behind Mexican Hat Butte. It is "an upfold or arch of stratified rock," so remarkable in its symmetry that photographs of it are used in geology textbooks. The anticline is 15 miles long and 1,500 ft high at its crest.

The Navajo call this Dzil Na'neest'ee'i, Mountain That Is Coiled. It is also known as Navajo Blanket . The pattern on the hill reflects the same design of the giant bullsnake (diyoosh) that lives inside. People who have tried to uncoil this snake have been hissed at with large puffs of air. Bad luck accompanies those who trespass this area and do not show the proper respect. For instance, when people disappear in this area, it is credited to the serpent; and when an oil company could not drill successfully at a site near here, it was because the snake kept pushing the drill bit out of the earth. Even white men have died here because of its power.