Caramoan has been officially adapted since 1619, the year it was founded by a zealous missionary, the venerable Spanish friar Francisco De La Cruz Y Oropesa. This 60-year old priest penetrated the thick virgin forest of the Caramoan Peninsula and found a small settlement in a place called Baluarte. Later on, this settlement was turned over to the administration of the Holy Bishopric in 1696. It was determined that the first name given to this place was Guta de Leche by the Dutch traders who operated a gold mine in Lahuy Island and frequented the area to trade with the natives, prior to the arrival of the Spaniards. The name was perhaps derived from the milkdrop stalagmites found among the rocks of Guta Port. But upon the arrival of the Spaniards, the place came to be called "Carahan" for the sea turtle, which was at that time to be found in great number along the shores of the Peninsula. 

Caramoan was founded in 1619 by a 60-year old zealous Spaniard missionary, Fray Francisco de la Cruz y Oropesa, who penetrated the thick virgin forest of the Caramoan Peninsula and discovered a small settlement in a place called Balwarte (an earth-work, rampart), In 1696, the said settlement was turned over to the administration of Sagrada Mitra. A parish dedicated to St. Michael the Archangel was also built.

In the summer of 1818, the Moros had once again sacked and burned the towns of Sagay and Indan, On October 26 of the same year, the provincial armadillo of Albay, led by 80-year old Pedro Estevan defeated a large Muslim fleet led by the son of the Sultan of Maguindanao, Prince Nune, in Tabgon Bay, off the Caramoan Peninsula. After this loss, the Muslims were not able to successfully attack a Bicol peninsular town again.