Chulumani was founded because of the supposed healing qualities of the area's mineral streams. However, when its fertile soils provided bumper crops of coca (the country’s best leaf for chewing), citrus, bananas, coffee and cacao, Chulumani soon became important as a trade center for nearby farming communities (300 of them now flock to the weekend market here).

Chulumani does have its ghosts. Nazi war criminal and local narco-trafficker Klaus Barbie lived in the sawmill above town after World War II. A recent documentary, The Road to Chulumani, documents the presidency of Jose Luis Tejada Sorzano, local resident and president of Bolivia during the Chaco War. Tejada Sorzano died in exile and it's said his ghost, as well as that of his mistress, haunts the nearby Castillo del Loro built by Paraguayan prisoners of war.