No colonial documents reveal the year of founding of the city of San Carlos, the only certainty is that there was the year of 1679, the year in which the Bishop of Nicaragua Fray Andrés de las Navas y Quevedo presented the King Spain need to found a city in the “mouth of the drain”, as it was called in colonial San Juan River and dated in the city of Granada on April 12, 1679.

Given the importance to Spain meant the drainage of the” lagoon” as it was called the Lake of Nicaragua and its natural drainage San Juan River cannot be denied that the ancient Spanish city of Jaen Nueva has held the current site of San Carlos, as the Guatemalan historian Father Dominic Juarros says. He attributed the founding of New Jaen to Captain Gabriel de Rojas in 1527 and in the followed years this the criteria had been taken into account by the Nicaraguan historian Tomas Ayon.

In other documents in the history of the Rio San Juan, written by Spanish chroniclers, to their arrival, they found the place inhabited by various indigenous tribes, Pipiles, possibly the first to reach the mouth of the Rio San Juan, where they sat, of Nahuatl origin. These Indians were known as Nicaraos or Niquiranos, those, were located along the Rio San Juan. In the first half of the sixteenth century these two groups were almost exterminated, only a small number of votes, managed to flee to the south of the Rio San Juan.

The Guatuzos, occupied the upper basin of the Rio Frio, they descended from the Caribi, Votes, Abangares Tices and Foreman were known as a warlike tribe, took up strategic positions on the slopes of the mountain overlooking the plains of San Carlos Guatuso and probably had West Indian origin. They had inhabited the archipelago also Solentiname, persecuted and decimated many of them were sold as slaves on the plantations of Chontales.

The Caribs and Miskito were located in the area of the lake, so far as the borders of the Mosquito, the Spanish failed to reduce them to use as slaves in their conquests.

Several villages founded by these Indians had been burned by themselves to avoid being filled by the conquerors, on these ruins the Spanish built their first cities in New Jaén, San Juan de la Cruz (now San Juan del Norte), El Castillo but more than cities were military forts that defended the trade routes and cities in the Pacific.

During the colonial period, the San Juan River region was important, above all, as a transit route across the river that bears his name, many grain traders began to establish large ranches along the shore of Lake Nicaragua .

Until the last century, control over the Rio San Juan, was cause of political conflict., foreign companies began to develop enclave-type activities, aimed at the exploitation of timber, rubber cultivation, rootlet, banana, and the river itself as inter-oceanic route. When completed these activities, the San Juan River region was forgotten and marginalized in economic and social development.