After the war, Alvarado was offered the governorship but declined, instead retiring to his wife Martina's family estate at Rancho San Pablo in 1848. Alvarado did not participate in the California Gold Rush, instead concentrating his efforts on agriculture and business. He opened the Union Hotel on the rancho in 1860, but his businesses were mostly unsuccessful. After Martina's death in 1876, Alvarado wrote his "Historia de California". He died on his ranch in 1882 and is buried at Saint Mary Cemetery in Oakland.