Araguapaz is located 268 kilometers northwest of the state capital, Goiânia, in the Rio Vermelho Microregion.

The main agricultural products were bananas, coconut, hearts of palm, pineapple, rice, manioc, corn (650 hectares), and soybeans.

In 1961 Dolzane de Paulo Bastos, from Orizona, Goiás, entered the area with his companions and settled along the banks of the Córrego Cambuí, in a region called Cavalo Queimado.

By 1962 there were 11 huts made of palm fronds and a dirt road—really a cow path—to the capital Goiás, 120 kilometers away.

In 1970 the town began to grow with the construction of a road linking Goiás and São Miguel do Araguaia.