In 1776, nearby Chumash Indians attacked the mission, setting it on fire with burning arrows. The roof, made of tule reeds, burned readily, and the fathers came up with the idea of tiling the roof with ceramic tiles, an idea which caught on with all of the other missions.
The Spanish soldiers who kept the mission's safety were successful in killing many of the bears that roamed the area, and thus Mission San Luis Obispo de Tolosa supplied many of the other missions with bear meat.
In 1845, Governor Pio Pico declared Mission buildings for sale and he sold everything except the church for a total of $510. The mission fell into ruins during the period of secularization and the priests that were left would rent out rooms to help support the mission. The Mission San Luis Obispo de Tolosa became the first courthouse and jail in San Luis Obispo County, California. In 1872, during the 100th anniversary of the mission, improvements began, but real restoration did not begin until 1933. The San Luis Obispo de Tolosa Mission is still the center of the busy downtown area. The mission functions as a parish church for the city of San Luis Obispo and although many changes have come to the mission, it remains the center of town.