The area was originally inhabited by indigenous peoples of South America ("Umbu" tradition) about ten thousand years ago.

In 1697, Spaniard Jesuits founded a Reduction in São João Batista, 40 km west of present-day Augusto Pestana.

One hundred years later, Augusto Pestana, then director for Public Lands in Northwest Rio Grande do Sul, founded a settlement on the Cadeado Range, between the Conceição and the Ijuizinho rivers (the name "Cadeado", padlock in Portuguese, is a reference to a checkpoint that existed on the road between Cruz Alta and Santo Ângelo).

The list of Pestanense members in the Brazilian Expeditionary Force (FEB), active in the Mediterranean Theatre of the conflict, included Artur Goergen, Eugenio Ladvig and Helmuth Matte, now honored with street names in the city.

The other FEB veterans were Sebaldo Goergen, Waldemar Senn, Albino Wilhens, Benno Müller, Oswin Wunder, Alípio Schmitt, Osvino Henrique Geiss, Adelino Mathias Dambroz, Emílio Papke, Alfonso Steiernagel e Arnoldo Gustavo Frantz.

[4] In the 1950s and 1960s, the settlement experienced a boom in wheat production and was incorporated in September 1965 as the municipality of Augusto Pestana.

It borders the municipalities of Ijuí and Coronel Barros to the north, Boa Vista do Cadeado to the east, Jóia to the south and Eugênio de Castro to the west.