During the Gilded Age, the federal government took significant action to transform the West's social and economic landscape. Much of this had to do with the government's relationship with native peoples. Previously, most tribes were treated with some level of respect. As more white settlers moved West and more valuable resources were found in the region, Native Americans came to be viewed as obstacles. The government responded by confining Native Americans to reservations and treating any who refused as enemies of the state. This led to the subjugation of many natives peoples and opened up the region to further white settlement. In 1887, the government passed the Dawes Act which sought to end communal living arrangements among Native Americans and force them to adopt American culture.

Furthermore, although Mexicans in the western United States had been US citizens since the end of the Mexican-American War, the government deliberately refused to intervene when their land was taken from them by white settlers. This inaction allowed Mexican Americans to be pushed to the fringes of western society and to lose many economic opportunities that they had come to expect as landowners.

The government also got involved in immigration in the West. For decades, many Chinese had been coming to the region in search of economic opportunities. They were instrumental in building the railroads, cultivating land, and building cities such as Los Angeles and San Fransisco. In 1882, Congress passed the Chinese Exclusion Act which specifically barred Chinese immigrants. This law changed the racial and social makeup of the region by specifically singling out a specific ethnicity for exclusion.

While much of the expansion of the American West during the Gilded Age was driven by non-governmental forces, the US government certainly played a role. The government was inspired by the principle of "manifest destiny," the idea that western expansion was a necessary and inevitable move for the country. And so, as much as the pioneering spirit was an individualist phenomenon, it was also partly aided by the government.

This could be seen in various ways. The Homestead Act (1862) encouraged western expansion and settlement, and this process accelerated after the end of the Civil War. When that war ended, the US Army also turned its attention west, coming into conflict with the indigenous population. The US government signed numerous treaties with western native tribes, many of which ended up being misleading and detrimental to those signatories. The 1887 Dawes Act allowed the US government the opportunity to divide native territory and buy up the land. Most indigenous people were forced to relocate to reservations located on less desirable land.

The development of the railroad was another important factor in western growth, although the government only supported private industry in this development. Nonetheless, one can see a number of ways in which the government took an active role in the economic and social transformation of the West.