Before the arrival of the Spaniards, the region was populated by nomadic tribes such as the Pames, Jonas and others collectively know as the Chichimeca. Their ancestors still live in the area to this day.

In the middle of the Sixteenth Century, after the discovery of silver in Zacatecas, a leg of the Camino Real passed through the valley below and to the north through the present day city of San Luis de la Paz. To protect the wagon trains moving north and south, the army established an outpost called Palmar de Vega, the first settlement of Pozos.

At around the same time, Jesuits arrived in San Luis to evangelize the local population. Legend has it that they brought the priests silver that they mined near the military outpost in an area know today as Santa Brígida (Saint Brigit in English). The mineral wealth was at the surface and the indigenous inhabitants had a very simple operation to extract it. The Jesuits began to mine the area using existing European techniques and continued to do so until 1767 when they were expelled from all the Spanish Realm.

Mining ceased until 1844 when the modern era of mining begins in Pozos with limited mercury extractions. By this time , the area is know as San Pedro de los Pozos. In 1871, what remained of the Jesuit mining operation was acquired by Francisco Torres and JM Cobos. Two years later The Parkman family of the England acquired title to the property.

With discoveries of lodes just to the west of town, Pozos begins to grow in importance as a mining district towards the end of the Nineteenth Century. Within a few years Pozos enters a boom period and, in honor of then President of Mexico, Porfirio Diaz, who was also one of the town's most important promoters, the town was elevated to the status of municipality and renamed Cuidad Porfirio Diaz. By 1895, there were 500 mining concerns, 306 operating mines and 70,000 to 80,000 residents. The Mexican stock exchange, the Bolsa de Valor, is founded to promote shares in Pozos mines beginning with Cinco Señores.

1910 marked the beginning of the Mexican Revolution and the beginning of the end for Pozos. The cessation of mining operations during the fighting and the subsequent flooding of the mines combined with a dramatic fall in the world price of silver to cause the mines to begin to close. Finally, with the advent of the Cristeros War in 1926, the last mine, the Angustias-Dolores, closed a year later in 1927.

By the 1950s, there were perhaps only 200 or less people living in Pozos.

In 1982, then Mexican President Jose Lopez-Portillo decreed Pozos a National Historic Monumental Zone recognizing Pozos's importance historically.

Today, according to the most recent census, the population has grown to 2,223 mostly farmers and herders or people who commute to nearby towns and factories. However, many US expatriates and others have begun to establish Pozos as a center for art.

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