Although the place was already mentioned in documents from 1307 referring 32 houses, the bulk of the population only settled after the 1492 Expulsion of the Jews from Spain by Ferdinand and Isabella, mainly Spanish Jews (sephardic). Close to the border, and already home to significant Jewish minorities the Cova da Beira region, the region received many refugees. They settled in the community of Fundão, which their numbers swelled to that of a city. The influx of Jewish artisans and merchants quickly transformed it into an important commercial and industrial center. With the establishment of the Portuguese Inquisition shortly thereafter, many Jews and New Christians were arrested, tortured, executed or had their possessions expropriated. The commercial dynamism of the city was affected.