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The city was founded as the capital of the colonial province of Honduras in 1537 by Spanish captain Alonso de Cáceres, fulfilling the orders of the Spanish governor of Honduras to establish a new settlement in the geographic center of the territory. The town was initially called Villa de Santa María de Comayagua; in 1543 the name was changed to Villa de la Nueva Valladolid de Comayagua.

Comayagua was declared a city in 1557, and in 1561 the seat of the diocese of Honduras was moved from Trujillo to Comayagua because of its more favorable conditions, central position and proximity to the silver- and gold-mining regions.