The resort developed around a small harbour, flanked by sandy beaches and close to the Roman ruins of Cerro da Vila. In Roman times this location was important in producing a fish paste known as "garum". The ruins also include the baths in which the mariners used to bathe.
The resort was founded by Portuguese banker Cupertino de Miranda who, with the resort's management company Lusotur (now Lusort) started initial planning and building in 1966. In 1996 Vilamoura was acquired by Quinta do Lago's Andre Jordan. In 2004 the resort was purchased by CatalunyaCaixa.