The early known settlers of Libagon were of "Bol-anon" ancestry (Boholano people). The settlers' first chosen leader of Libagon was Domingo Mateo Espina. He was the son of Agustin Mateo Espina and Francisca Barbara and the grandson of Pedro Espina of Duero, Bohol. Espina's wife, Potenciana Escaño, was called Capitana Potenciana by townsfolk, in recognition of her role as First Lady of Libagon. The town of Libagon was founded in 1845. At this point in the history of the municipality, the barrios or barangays under Libagon included Sogod and Bontoc at the farthest north and Punta at the farthest south. The Poblacion comprised two barangays: Jubas (at the south) and Talisay (at the north).