Once the capital of Baja California Sur, Loreto was also the first European settlement in the Californias over 300 years ago. After serving as the capital for 132 years, La Paz superseded Loreto as the capital of Baja Sur and for all practical purposes Loreto  faded into oblivion until 1973 when the completion of the transpeninsular highway finally brought the city within reach of the average tourist.

Today, The Villages of Loreto Bay  is one of the largest resort communities in North America committed to sustainable development.  It is being developed by the Scottsdale, AZ based Loreto Bay Company and Citigroup Property Investors. The master plan involves a series of romantic, walkable seaside villages each of which will be pedestrian friendly, including retail, entertainment and recreational facilities. Eventually all electricity in this community will be generated by wind turbines while bicycles and electric cars will be the primary means of transportation around the villages.

Offshore fishing remains a principal tourist attraction, as well as, an international airport, world class tennis center, an 18 hole golf course and the Loreto Bay National Marine Park.