In the 16th century the dockyards of Santa Cruz earned a reputation as the best in all the Canary Islands. Ships were made with Canary pine, a sap-filled wood that was nearly impervious to termites, making the ships constructed here some of the most reliable and longest-lasting in the world. The town became so important that King Felipe II had the first Juzgado de Indias (Court of the Indias) installed here in 1558, and every single vessel trading with the Americas from mainland Spain was obliged to register.

The boom brought economic security, but it led to problems as well. Santa Cruz was frequently besieged and occasionally sacked by a succession of pirates, including those under the command of Sir Francis Drake.