Human settlements in the Guayangareo Valley in which Morelia is located have been dated back as far as the 7th century. Artifacts found here have shown Teotihuacán culture influence on early cultures in this area. In the 12th century, the Tarascos or the P'urhépecha arrived in the valley. They dominated it politically for the rest of the pre-Hispanic period but did not build any major settlements here. Between the 12th and the 15th century, Matlatzincas moved into the area with permission of the Tarascos, who were based around nearby Pátzcuaro Lake. The main Matlatzinca settlement was where Júarez Plaza in the city is today.
The Spanish pushed into the Guayangareo Valley between 1525 and 1526, headed by Gonzalo Gómez. In the 1530s, the area was evangelized by Franciscans such as Juan de San Miguel and Antonio de Lisboa.
What would become the city of Morelia was founded by Viceroy Antonio de Mendoza and a number of encomenderos in 1541, who first named it Nueva Ciudad de Mechuacan (New City of Michoacán). The newly founded settlement grew quickly, prompting Vasco de Quiroga to go to Spain and procure for rival settlement Pátzcuaro the title of city and a seal, to prevent “new city” from becoming the capital of Michoacán. The action also required that the new settlement change its name to Guayangareo. In 1545, Guayangareo gained city status from Charles V in 1545 with the name of Valladolid, after the hometown of Antonio de Mendoza. This was part of a power struggle between Antonio de Mendoza and Vasco de Quiroga over the province of Michoacán. During Quiroga’s lifetime, he managed to keep political and ecclesiastical power in Pátzcuaro despite the viceroy’s and encomenderos’ objections. However, Quiroga died in 1578. By 1580, both political and religious authority had been transferred to the city of Valladolid, moving the College of San Nicolás, which Vasco founded and laying the groundwork for establishing a new cathedral for the