The town was founded in 1770 by Carlos Murphy, a grenadier at the service of King Charles III of Spain, although a first settlement existed here from the 17th century.
The city is the seat of the Roman Catholic Diocese of Caacup�. Caacup� is best known as the site of the Virgin of Caacup�, which is housed in the cathedral. A major religious festival is held annually on 8 December in honour of the statuette "Our Lady of the Miracles". This statuette, carved in the 16th century by a devout convert, was miraculously saved from a great flood, and numerous miracles are ascribed to it. An enormous basilica stands in the centre of the town, and here 300,000 of the faithful make their way, in a pilgrimage, for the festival..
During the rest of the year Caacup� is a quiet provincial town. It has a park with amusements
