The oldest archaeological remains that have been found in Puerto Vallarta, to date, come from the site called La Pedrera on Costa Rica Street, in the Lázaro Cárdenas neighborhood. It is probable that the first settlements were established around the year 300 B.C. in the Middle Preclassic. A thousand years later, the Aztatlán people arrived in the Early Post Classic; and finally it was inhabited by groups of the Banderas culture in the Late Post Classic. This culture was the one the Spaniards encountered when they arrived in the valley.
Lieutenant Lázaro Blanco says in his Relación de Compostela, written in 1584, that the natives called this valley “Xihutla” which means “place where grass grows”. Captain Francisco Cortés de San Buenaventura was the conqueror of this region. The chroniclers narrate that when he arrived at the town of Tintoque, more than twenty thousand armed Indians were waiting for him at the entrance, carrying a small feathered banner in their hands and another in their quiver.
The Spaniards brought four royal banners and a red damask banner with an image of La Purisima in front and a cross in the back. Seeing so many enemies, the friar who came with them knelt down to ask for divine help. At that moment, the banner of Damascus was filled with brightness, instilling courage in the soldiers and terror in the Indians, who surrendered, leaving their flags and weapons at the feet of the priest. This happened in March 1525. Because of this, the Spaniards gave the valley the name of Banderas (Valle de Banderas) and that is how it is called to this day.
Puerto Vallarta remained isolated from the rest of the world between the mountains, the ocean and the Ameca River for many years. Economic activity was found in the towns of Cuale, San Sebastian and Mascota, in the silver mines. The area that today corresponds to Puerto Vallarta was used for loading and unloading supplies for the mining companies in the mountain towns. At that time the place was known as Las Peñas de Santa Maria de Guadalupe, named after Don Guadalupe Sanchez Torres, a salt merchant, who regularly visited Las Peñas, as the mines required large quantities of salt to refine the silver.