Before the Court of Claims was established, monetary claims against the federal government were normally submitted through petitions to Congress. By the time of the Court's creation, this workload had gotten unwieldy, so Congress gave the Court jurisdiction to hear all monetary claims based upon a law, a regulation, or a federal government contract. The Court was required to report its findings to Congress and to prepare bills for payments to claimants whose petitions were approved by the Court; since only Congress was constitutionally empowered to make appropriations, Congress still had to approve these bills and reports, but this was normally pro forma.
The Court originally had three judges, who were given lifetime appointments. The judges were authorized to appoint commissioners to take depositions and issue subpoenas. The federal government was represented in the Court by a solicitor appointed by the President.
In 1861, Abraham Lincoln in his Annual Message to Congress asked that the court be given the power to issue final judgments. Congress granted this power with the Act of March 3, 1863 and explicitly made the judgments appealable to the Supreme Court. However, it also modified the law governing the Court so that its reports and bills were sent to the Department of the Treasury rather than directly to Congress. The moneys to cover these costs were then made a part of the appropriation for the Treasury Department.
The conflict inherent between these two provisions was made manifest when in 1864, the decision in Gordon v. United States was appealed to the Supreme Court. The Supreme Court denied that it had jurisdiction, because the decisions of the Court of Claims, hence any appeals, were subject to review by an executive department (see also 117 U.S. 697). Less than a year later, Congress passed a law removing review of the Court of Claims from the Treasury Department.
In 1887, Congress passed the Tucker Act which further restricted the claims that could be submitted directly to Congress, requiring that these claims instead be submitted to the Court of Claims. It broadened the court's jurisdiction so that “claims founded upon the Constitution” could be heard. In particular, this meant that monetary claims based on takings under the eminent domain clause of the Fifth Amendment could be brought before the Court of Claims. The Tucker Act also opened the Court to tax refund suits.
Depredations against American shipping committed by the French during the Quasi-War of 1793 to 1800 led to claims against France that were relinquished by the terms of the Treaty of 1800. Since the claims against France were no longer valid, claimants continually petitioned Congress for the relief that had been waived by the treaty. It wasn’t until January 20, 1885 that a law was passed, 23 Stat. 283, that provided for consideration of the matter before the Court of Claims. The lead case, Gray v. United States, 21 Ct. Cl. 340, written by Judge John Davis, includes a complete discussion of the historical and political circumstances which led to the hostilities between the United States and France and their resolution by treaty. The cases, termed "French Spoliation Claims", continued in the court until 1915.
In 1925, Congress changed the structure of the Court of Claims by authorizing the Court to appoint seven commissioners who were empowered to hear evidence in judicial proceedings and report on findings of fact. The judges of the Court of Claims would then serve as a board of review for the commissioners.
In 1932, Congress reduced the salary of the judges of the Court of Claims as part of the Legislative Appropriation Act of 1932. Thomas Sutler Williams was one of the judges of the Court, and he sued the federal government, claiming that his salary could not be cut because the Constitution specified that judicial salaries could not be reduced. The Supreme Court ruled on Williams v. United States in 1933, deciding that the Court of Claims was an Article I or legislative court, and that therefore Congress had the authority to reduce the salaries of the judges of the Court of Claims ().
Beginning in 1948, Congress directed that when directed by the court, the commissioner could make recommendations for conclusions of law (). Chief Judge Wilson Cowen made this mandatory under the court rules in 1964.
In 1953, Congress passed a law which converted the Court of Claims into an Article III court. That act also raised the number of commissioners to 15.
Two more judges were added to the court by , in 1966, bringing the total to seven.
Congress terminated the Indian Claims Commission in 1978 and required that any pending cases be transferred to the Court of Claims. Of the 170 cases so transferred many were complicated longstanding accounting claims that had been before the Commission for years. One of the most famous of these cases was United States v. Sioux Nation of Indians, which ultimately reached the Supreme Court (). Aside from its large judgment awarded to the Sioux, the case also featured interesting questions about judicial power and the ability of Congress to waive the Federal government's legal defense of res judicata to allow a claim to be judicially determined.
In 1982, Congress abolished the court, transferring its trial level jurisdiction to the newly created United States Claims Court (which is now known as the United States Court of Federal Claims) and its appellate jurisdiction to the equally new United States Court of Appeals for the Federal Circuit. By this time, the Court had expanded to have seven judges; they were transferred to the Federal Circuit.