Before the arrival of the Spanish conquistadores, the inhabitants of central Chile were an indigenous people known as the Changos, who called the area now occupied by Viña del Mar Peuco, which meant, “here, there is water.” With the coming of the Europeans, the land was transformed and by 1580 the whole area had become an encomienda, or estate granted to a conquistador. Vineyards were planted here, hence the name Viña del Mar, "vines by the sea."

A century later, these same lands were divided into two: south of the Marga-Marga estuary up to Barón Hill was known as “The Homestead of the Seven Sisters,” while the area northwards, all the way to Concón, retained the original name.

The following century saw many rich Portuguese merchants sailing into the bay of Valparaíso. One of these was Francisco Álvares, who was so enchanted by this new land that he bought it, installing his estate house in the area that is now the Quinta Vergara park. His wife, Dolores Pérez, was a great lover of plants and transformed the surrounding countryside with gardens and orchards. In the mid-nineteenth century, these were greatly added to by their son who brought back new species from his voyages in Australia and the Far East.

Such pastoral pursuits were probably less important for the development of the city, however, than another event that took place during the same period, the arrival of the railway linking Valparaiso to the central valley region. With this new communication, the city grew rapidly and prospered, building the Viña del Mar train station. Meanwhile, José Francisco Vergara Etchevers, the assistant engineer on the project and by marriage a large landowner in the city, went on to help develop the town in many other ways. He ceded lands to be used for the water supply, a school, the cemetery and a slaughterhouse. He sold the property along the tracks which later became Álvares and Viana Streets and put up mansions that looked on to the present-day Avenida Valparaíso. Vergara later moved on to politics, becoming the Minister of the Interior in the government of Domingo Santa María and War Minister under Aníbal Pinto. He also fought in the War of the Pacific.

The railway had a profound effect on the city. The doctor Teodoro Von Scroeders encouraged the building of a new station to give people access to thermal baths nearby. Shroeders also planned the development of the Castillo Hill neighborhood. Along the train route, ever more neighborhoods were springing up, including Recreo in 1894, whose name, Spanish for recreation, alludes to the custom of local inhabitants of passing their leisure time looking out at the sea. Around this period two city dignitaries by the names of Luis Barros Borgoño and Alfredo Azancot (architects responsible for the Rioja and Carrasco Palaces), undertook the redevelopment of the Recreo shoreline, filling in the original reefs and replacing them with a beach and creating one of the most popular resorts along the coastline.

New stops were also created for the trains at Chorrillos and El Salto, the latter being named after a nearby waterfall. Neighboring landowner and politician Benjamín Vicuña Mackena then took his part in the creation of the present day Garden City. It was Mackena's influence that first led to Viña del Mar being developed as a seaside holiday resort. He proposed the creation of plazas and parks, of more attention put into landscaping, of new and more flamboyant hotels to emphasize the town's recreational credentials. These changes were highly successful, both with the inhabitants of Viña del Mar, as well as people living in the surrounding area. The Caleta Abarca cove area was the sector initially chosen for this of development.

By 1878, the growth in the population had spurred the need for establishing some form of municipal authority. Permission to organize such a body was requested from the Governor of Valparaíso, who took a year to reply in the affirmative. This heralded a golden period in the history of Viña del Mar; new industries and public institutions made their appearance, and many new businesses opened on Libertad Avenue. In part, this was also the result of the economic success being enjoyed by merchants in neighboring and then extremely prosperous Valparaíso.

Local industry, led by the sugar refinery, demanded modernization, which led to the installment of electric light in 1882, giving Viña del Mar a status enjoyed by a highly select club of cities around the world. This was the same year Paris was electrified.

In 1889, José Francisco Vergara died. His lands were divided among his children, with his daughter Blanca inheriting everything south of the Marga-Marga, and Salvador, his son, taking the northern territories, which he started to urbanize in 1892. The major earthquake of 1906 destroyed much of the city, and a huge task of reconstruction was undertaken by the local inhabitants. It was during that period that such ostentatious projects as the Vergara and Carrasco Palaces, the Délano mansion (that was to become the Fonck Museum), and Wulff Castle were undertaken. By the 1930s, Viña del Mar was deemed so important that even the federal government stepped in to help, partly financing the Hotel O'Higgins and Municipal Theatre in Plaza Vergara, as well as the Presidential Palace, the Municipal Casino, Salinas resort, and an urbanization program for the whole stretch of coastline between Reñaca and Concón.

By then, Avenida Valparaíso was completely built-up, with a preponderance of large, neo-classical buildings, modeled after European architecture with its dislike, at the time, for the excesses of baroque. This tendency was reinforced by European immigrants who built in the manner of their homelands using easily obtainable materials like wood. Still today, it is the English colonial and neo-gothic architectural styles that predominate in Viña del Mar.

During the 1950s, the Caleta Abarca resort took shape, as did the Marina and Perú Avenues. The 60s and 70s also saw the city's face change, with special emphasis placed on the development of the Reñaca district, with the construction of numerous hotels and other tourist infrastructure that completely transformed this previously industrial sector. And so it was that in 126 years, a coastal vineyard became the modern "Vines by the Sea" tourist resort.