It was founded in 1768 under the administration of Governor Carlos de Beranger y Renaud after receiving the royal command from Carlos III of fortifying the northern area of the archipelago. Therefore, the dwellers of Chacao were moved to the new settlement.
The city was named Villa y Fuerte Real de San Carlos de Chiloé. It operated as a seat and base for the formation of armies of the Crown during the Chilean Independence war.
Once independence was effected, Chiloé remained faithful to the monarchy and the defense before the attack led by Lord Cochrane was organized under the government of Antonio de Quintanilla. Cochrane was defeated as he attempted to siege San Miguel de Ahui Castle in 1820. Likewise, Freire's expedition was defeated in 1824.
Two years after the first expedition -which did not succeed- Ramón Freire managed to impose the Chilean troops over the Chilota resistance on his second attempt. Afterwards, the Treaty of Tantauco was signed, thus sealing the incorporation of Chiloé to the new Republic of Chile.
Years later, by virtue of a law passed on July 4, 1834, the name of the city of Villa San Carlos was changed to Ancud. On July 1, 1840, Pope Gregory XVI raised the diocese of San Carlos de Ancud, placing the church head in the City of Ancud.
During the nineteenth century, the city stood out for its active commercial life that resulted from the intense sea trade. This decreased after the Panama Canal was opened.
Early in the twentieth century, an important colony of settlers -mainly German- became established in the proximity of the city. These people provided a new impulse to commerce, dealing especially with timber.
The arrival of the railway in Puerto Montt in 1912 gave origin to a crisis as far as commercial activities in Ancud were concerned. A slow decay began until the capital of the province was moved to Castro in 1982.
Ancud is a beautiful city and the people who live there are pleasant and rich with tradition. After experiencing three centuries of isolation, they have developed their own luring and bewitching culture. The City of Ancud is an important tourist destination, with a fascinating history at every corner.