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Under the compromise, Texas surrendered its claim to New Mexico, as well as its claims north of the Missouri Compromise Line. It transferred its public debt to the federal government, and retained the control over El Paso. California's application for admission as a free state with its current boundaries was approved and a Southern proposal to split California at parallel 35° north to provide a Southern territory was abandoned.
Also under the compromise, the New Mexico Territory and Utah Territory could in decide in the future to become slave states by popular vote, even though Utah and a northern fringe of New Mexico were north of the Missouri Compromise Line where slavery had previously been banned. These lands were generally unsuitable for plantation agriculture and their existing settlers were non-Southerners uninterested in slavery. The unsettled southern parts of New Mexico Territory, where Southern hopes for expansion had been centered, remained a part of New Mexico instead of becoming a separate territory.
The most significant Southern gains were a stronger Fugitive Slave Act, the enforcement of which offended Northern public opinion, and preservation of slavery in Washington, DC, although the slave trade was banned there.
The Compromise became possible after the sudden death of President Zachary Taylor. Although Taylor was a slave owner, he favored excluding slavery from the Southwest. Whig leader Henry Clay designed a compromise, which failed to pass in early 1850, due to the opposition of both pro-slavery southern Democrats, led by John C. Calhoun, and anti-slavery northern Whigs. At Clay's suggestion, Democratic Senator Stephen Douglas divided Clay's bill into several smaller pieces and narrowly won their passage over the opposition of those with stronger views on both sides.
After Taylor died suddenly on July 9, 1850, Vice-President Millard Fillmore became president. Despite being a Northerner from New York, Fillmore had very different views on the slavery issue from Taylor. Before Taylor's death, Fillmore told him that, as President of the Senate, he would give his tie-breaking vote to the Compromise of 1850. When Fillmore took office, the entire cabinet offered their resignations. Fillmore accepted them all and appointed men who supported the compromise, except for Treasury Secretary Thomas Corwin. When the compromise finally came before both Houses of Congress, Fillmore urged Congress to pass the original bill. This provoked an enormous battle in congress that crushed public support.
On August 6, 1850, Fillmore sent a message to Congress recommending that Texas be paid to abandon its claims to part of New Mexico. This, combined with his mobilization of 750 Federal troops to New Mexico, helped shift a critical number of northern Whigs in Congress away from their insistence upon the Wilmot Proviso—the stipulation that all land gained by the Mexican War must be closed to slavery.
Douglas's effective strategy in Congress combined with Fillmore's message to Congress gave momentum to the Compromise movement. Breaking up Clay's single legislative package, Douglas presented five separate bills to the Senate which individually would:
1. Admit California as a free state.
2. Settle the Texas boundary and compensate the state for lost lands.
3. Grant territorial status to New Mexico.
4. Place federal officers at the disposal of slaveholders seeking escapees—the Fugitive Slave Act.
5. Abolish the slave trade, but not slavery, in the District of Columbia.
Each measure obtained a majority, and, by September 20, President Fillmore had signed them into law. Whigs on both sides were upset by the compromise, which led to party division. An Ohio Whig was quoted as saying "God Save us from Whig Vice Presidents."