Kristin Smart, 19, of Stockton was last seen near her dorm, authorities said.
But she didn't go to her room and never contacted family or friends again, the San Luis Obispo Sheriff's Office said. She did not have identification, money or extra clothing when she disappeared.
A massive search was mounted. Investigators combed the sprawling campus midway between Los Angeles and San Francisco. They repeatedly interviewed the male student who said he walked with Smart and saw her walking toward her dorm.
But they never found Smart and she was declared dead in 2002. No arrests have been made.
Now authorities say they may have gotten a break in this very cold case.
Digging near the "P"
A team of investigators is digging for Smart's remains on sun-baked hills in a far section of the 1,321-acre campus
The excavation, is taking place near the Cal Poly "P," a giant letter set into the hillside.
Students and anybody else on campus can watch the searchers, which is why Sheriff Ian Parkinson said he decided to hold a news conference to explain what is happening.
The sheriff's office has never stopped investigating the case, he said. Investigators developed leads over the last few years that indicated the body would be found on campus, the last place Smart was seen, he said.
Based on those leads, three dogs from the FBI training facility in Quantico, Virginia, were flown to San Luis Obispo to search for Smart's remains.
"They are specially trained in human scent detection, specifically with regards to decomposition and decomposing human remains," said Sean Ragan, special agent in charge of the Criminal Division in the Los Angeles field office.
The dogs -- two springer spaniels and a shepherd mix -- know how to sniff out extremely old human remains, he said. They're trained at Civil War burial sites in Virginia.
The dogs responded to several areas in San Luis Obispo, including the spots on campus, he said.
The excavations will initially go down about 3 feet at the spots where dogs detected something and extend outward about 90 feet, he said.
'We are hopeful'
Twenty-five members of the FBI evidence response team, along with many local officers, are searching the areas and should be on the job about four days, Ragan said Tuesday.
"We are hopeful this will lead to the finding of Kristin or evidence that will bring closure to the family and ultimately the community," Parkinson said. But, he added, "We must manage our expectations."
Parkinson said investigators looked in that part of the campus previously but without the specialized people they have now.
All the students at Cal Poly know about Smart's disappearance and they're hopeful her remains will be found.
"They've had those might-be's before, I know it's a lot," graduate student Jason Colombini told CNN affiliate KYET
. "Hopefully this one is the break they've been looking for."
Smart's parents released a statement in May to mark the 20th anniversary of their daughter's disappearance, saying they have faith in the sheriff's office.
In the years immediately after Smart's disappearance, her mother, Denise Smart, told CNN affiliate KOVR
: "When you lose a loved one and you have the opportunity to bury them, after that time you have a time to grieve and a time to move on. When you have a missing child you don't have that privilege."