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Villarrica was founded in 1552, but the Mapuche wars prevented extensive settlement of the area until the early 20th century. Founded by the Spanish conqueror Pedro de Valdivia, it was a Spanish fortress built primarily to serve as a base for gold mining in the area. The fortress's mission succeeded until 1599, when the Mapuche staged an uprising and destroyed the original town. On December 31, 1882, a historic meeting between more than 300 Mapuche chiefs and the Chilean government was held in Putue, a few kilometers outside of the town. The next day, the town was refounded.

Today this pleasant town of about 35,000 people, situated on the lake of the same name, is in one of the loveliest, least-spoiled areas of the southern Andes and has stunning views of the Villarrica and Llaima volcanoes. To Villarrica's eternal chagrin, it lives in the shadow of Pucón, a flashier neighbor several miles down the road. Many travelers drive through without giving Villarrica a glance, but it has some wonderful hotels that don't give you a case of high-season sticker shock. Well-maintained roads and convenient public transportation make the town a good base for exploring the area.

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