Having invested significant time and resources in constructing a legionary fortress at Camolodunum, once Legion XX moved to their new base in Gloucestershire in AD 49, Emperor Claudius instructed that a colonia, or colony of retired veterans, should be established in its place. The new colonia accommodated a garrison of army veterans, and provided a model of Roman society for local people to emulate. Colchester was the first of four such coloniae in Britain, the others being Lincoln, Gloucester and York. Tacitus wrote of the colonia at Colchester that 'A colony was settled on conquered lands at Camulodunum by a strong detachment of veterans, who were to serve as a bulwark against revolt and to habituate the friendly natives to legal obligations'.
Significant archaeological evidence for the conversion of the early Roman legionary fortress to civilian use was uncovered during major excavations on Culver Street in the early 1980s. These excavations exposed six reused barracks and identified evidence for re-flooring and insertion of new internal walls indicative of civilian use. New civilian buildings dating from this period have also been identified. For example, excavations at Lion Walk uncovered the remains of an impressive town house comprising three ranges of rooms set around a gravel yard and bounded by a series of oak-lined drains. The remains of wall plaster painted with imitation marble designs suggests considerable investment in this building.
During this period of the early Roman colonia, Colchester also became the centre for the imperial cult, with a huge temple dedicated to the emperor Claudius being constructed around AD 54, following Claudius' death.
Sheepen continued to be a manufacturing and trading centre during the period of the colonia. Archaeological excavations in the 1930s revealed the maintenance and replacement of non-Roman post-built structures at Sheepen throughout this period. There is also evidence for numerous industrial processes taking place here including metalworking, enamelling and leatherworking. Pottery kilns from the period of the colonia have also been recorded at Sheepen.
Excavations have revealed large quantities of luxury items dating from this period, including fine pottery and jewellery, suggesting that some of the town's wealthiest residents had a very comfortable lifestyle. However, the situation for many of the native Trinovantes was a far cry from such luxury. Tacitus records that 'The settlers drove the Trinovantes from their homes and land, and called them prisoners and slaves'. The resentment that such treatment caused no doubt found an outlet in the Boudican revolt, and despite long-running divisions between the two neighbouring tribes of the Iceni and Trinovantes, Boudica was able to raise a large native army from the region. Colchester was the first major target of the Boudican revolt against Roman authority in AD 60/61.