During the first three decades after the discovery, little was done in terms of colonization, only some expeditions to draw maps of the coast. Around 1504, a squadron commanded by Cristovão Jacques leaves a large number of Portuguese in the region of Porto Seguro. It is not known for sure whether it was in this or in another expedition later on, in 1516, that two Franciscan priests came to whom is attributed the construction of Igreja da Glória - the first church built in Brazil, from which only ruins are left - on a hillock of the same name. At the foot of the hill was born Aldeia de Santa Cruz. The economy of the small village was based on 'pau-brasil' (red brazil dyewood) extraction. The tree was pervasive all along the coast and the red dye wood, highly valued in Europe, was used for tissues. However, the attempts to settle a nucleus in the area were faced with the frequent Indian attacks from aimoré indians, who ended up killing many Portuguese and the two priests, besides destroying the church they had built.

It was only in 1532, when the Brazilian coast had already been sacked by corsairs looking for 'pau-brasil' and there were rumors about the discovery of precious metals in the Spanish America, that Portugal decided to promote the occupation of the territory through the system of 'capitanias hereditárias' (designation of the first administrative divisions of Brazil). The Capitania de Porto Seguro was given to Pero Campos de Tourinho, a Portuguese noble from Viana do Castelo. His land extended from the right border of Rio Jequitinhonha to the left border of Rio Doce. In 1534, after selling everything he had, he transferred himself to Brazil in two caravels and two large vessels, bringing a total number of 600 people, among them his wife, his sons Fernão and André, relatives and colonists. In the same year he founded the village Nossa Senhora da Pena, where today is the upper town of Porto Seguro, and transferred the Aldeia de Santa Cruz to an elevation close to the out fall of the river João de Tiba, to the north, where today is Santa Cruz Cabrália.

The creation of the 'capitanias' system' helped the economic diversification of the region as the village becomes the base from where expeditions departed in search for precious stones and metals. Besides that, sugar mills are built in the region. However, the settlement continued to be attacked by the aimorés and the same thing happened in most of the other 'capitanias': the Portuguese colonists were killed, their houses destroyed and the plantations were burned.

The failure of the 'capitanias' has made Portugal settle a general government in Salvador, in 1549. The first general-governor, Tomé de Souza, brought troops and ships prepared to defend the coast and Jesuits to catechize the Indians. This religious order was very important to promote the colonization. The Jesuits arrived in the region of Porto Seguro in the same year the government was installed. They founded Jesuit villages in several points of the 'capitania' and attracted Indians who accepted to be catechized in exchange for protection against slavery. That was the case of the villages of São João dos Índios, presently Trancoso and Ajuda.

The 'capitania' of Porto Seguro remained practically underdeveloped until the middle of the 18th century. In 1750, Marquês de Pombal sets a new policy for the Portuguese colony, banishing the Jesuits and incorporating the 'capitania' to the Crown. This measure improved the situation of poverty they lived in. In the 19th century, the village survived on fishing, boat building, wood cutting and agriculture.

In 1954 began the construction of the road Rio-Bahia, BR-101, which brought some development to the region. On the other hand, it caused the devastation of woods. In 1972 the road was concluded and this led to a new period in the history of Porto Seguro, as it became one of Brazil's favorite tourist attractions. Besides monuments, churches and the colonial houses, the beautiful landscape seen by Cabral's squadron evokes history. In 1976, the whole area was decreed to be a National Monument by the National Historical and Artistic Patrimony Institute - IPHAN. As we are know in the year 2000, the town gets prepared for the celebration of the 500 years of Brazil.