The first area to be settled was known as La Fabrica, where the road from Puerto Montt and the coast reached Llanquihue Lake. Other landmarks in its early history include the opening of a Catholic church in 1872 and the founding of the Deutscher Verein ("German Club") in 1885. The town received official status in the form of a Título de Villa ("Town Certification") in 1897. The commune of Puerto Varas, as it exists today, was formed in December 1925, when the Ministry of the Interior divided the country into provinces, and communes.