Puerto Vallarta (formerly known as Puerto Las Peñas) lies on the margins of the Cuale River. It is bordered by the Sierra del Cuale Mountains to the south, the Sierra Madre Mountains to the east, the Sierra Vallejo to the north and the Pacific Ocean to the west. In 1520, Francisco Cortés de San Buenaventura entered a spacious valley on his way back from Colima, entering Xalisco territory. He encountered numerous indigenous people who provided him with fowl, corn, fish, and other basic supplies. Since then the region was named "Valley of Banderas".

In the mid-19th century, the place where the city now lies was the docking point for a ship navigated by José Guadalupe Sánchez Torres, who, on his way back from the Islas Marías (now an infamous penal colony) transported salt for the El Real Del Cuale Mining Company, located in the mining district of Mascota. From there it was carried to the dock by mule, where Don Guadalupe had built a shed using four logs and a palapa roof to guard against the elements. This was a stop for the mule drivers who carried material back and forth to the Cuale. In November 1851 he boarded his ship and set out to bring his family back with him from Cihuatlán (see-hua tlan). He renamed the place Las Peñas, because of the enormous boulders still standing near the ocean's edge.

Los Muertos Beach was a lonesome spot where gold and silver smugglers disembarked to load and take the bars of the precious metals. New houses were built for the salt workers that began arriving with their families. Thus, the rancho Las Peñas de Santa María de Guadalupe- so named in honor of its founder and the date of his arrival, December 12th , which is the day Mexicans honor their patron saint, the Virgin of Guadalupe, and of course, the founder's name was Guadalupe, lest we forget- kept growing. Every twelve days, mid-size ships loaded with salt would dock here. The port's prosperity increased.

July 14th 1885 was another memorable date for the city: the port was open for maritime traffic and renamed Puerto de Peñas. On October 31st 1902, the lighthouse in Cabo Corrientes was turned on, reaching more than 100 miles in the high seas. It was declared a county on May 31st 1918. It was renamed yet again in memory of the illustrious Ignacio L. Vallarta, who was state governor. We can safely say that Puerto Vallarta's owes its popularity as a tourist destination to film director and maverick John Houston, who came here at the insistence of Don Guillermo Wulff in the beginning of the sixties to film 'The Night Of The Iguana'; starring Deborah Kerr and Richard Burton, who at the time was having an affair with Elizabeth Taylor. The press followed, and the rest, as they say, is history.