Originally, this town was named "Tapaichu�", founded by Domingo Mart�nez de Irala in 1538 in the territory of an Indian people who lived in that land, on the banks of the Ypacarai Lake. Its inhabitants lived in the area surrounding the present church of Aregu�.
At the beginning of the Spanish colonization, the town was a cattle raising farm of Mercedarian origin. At the end of the 19th century, it was developed as a summer city where most of the writers, artists and intellectuals lived in the hot months
