Oregon is the only state in the country whose flag has a different image on each side. It was also among the last states to adopt a flag, only doing so in 1925 after Portland’s postmaster, J.M. Jones, asked for a flag to present to the U.S. Post Office Department for a display.

The front side of the flag shows the escutcheon (center part) of the state seal with “STATE OF OREGON” above and “1859” (the year of statehood) below. The escutcheon is supported by thirty-three five-pointed stars representing Oregon as the thirty-third state to join the Union. On the reverse is a beaver, one of Oregon’s state symbols, perched on a log and facing to the right. All elements are in gold on a navy blue field, Oregon’s colors.

The design was based on Oregon's nineteenth-century military flag, a standard regimental flag with the state seal’s escutcheon on a nearly-square blue field. The military flag, which followed standard U.S. Army specifications for size and proportions, represented Oregon’s militia (now the Oregon National Guard). The new state flag had different proportions and placed the beaver on the back.

On February 26, 1925, Gov. Walter Pierce signed Senate Bill 195, An Act Adopting a State Flag, and Adj. Gen. George A. White asked the Meier & Frank Department Store in Portland to create the first flag. Seamstresses Blanche Cox and Marjorie Kennedy finished the flag in time to represent Oregon in the all-state flag display at the 150th anniversary of the Battle of Lexington in April 1925.

The Oregon legislature enacted a law in 1953 requiring that the state flag be flown over schools, courthouses, and other public buildings. In 1962, the state’s procurement office issued detailed specifications for the flag, which were amended in 1966. The flag’s official proportions (height to width) are 500:833; in practice, flags are usually made in proportions of 3:5 or 2:3.

In 2008–2009, the Oregonian created a contest to update the state flag. While ultimately unsuccessful in changing the design—the governor and the legislature had no interest in changing the flag—the contest generated 2,500 entries. In one unforeseen result of the contest publicity, the original 1925 flag—once thought lost in the 1935 fire that destroyed the state capitol—was found framed in a stairwell in Pierce Library at Eastern Oregon University in La Grande. Gov. Pierce’s grandson had donated the flag to the library dedicated in honor of his grandfather in 1954. The flag is now prominently displayed there.