There are four different versions about the founding of the town, including that it was formed when a small group of people from the neighbor town of Guayama came to the region looking for a port to export and import merchandise. Still, a local newspaper called "La Gaceta de Puerto Rico" published in 1868 that Arroyo was founded in 1852. Between 1859 and 1860, City Hall signed agreements to open streets and build a town square and a sewer system for the town.