The name Huatulco comes from the Náhuatl word cuaúhtolco, meaning “the place where the wood is adored.” Ancient legend says that the great civilizing god Quetzalcóatl left the inhabitants of the bay and port of Santa Cruz a wooden cross.

The seat of the refined Zapotec culture, the region witnessed the movement of Spanish boats and violent pirate raids. Hernán Cortés used it to distribute the produce of his farms along the coast, which turned Huatulco into an extremely active port.

This attracted pirates during the second half of the 16th century, including Drake and the famous Thomas Cavendish, causing the local inhabitants to flee. Thereafter the place was a fishing village, until the Mexican government began developing it as a planned tourist complex in 1983.