It is the oldest Chinatown in the world, established in 1594[3][4][5][6] by the Spaniards as a settlement near Intramuros but across the Pasig River for Catholic Chinese; it was positioned so that the colonial administration could keep a close eye on their migrant subjects.

Noted residents include Saint Lorenzo Ruiz, the Filipino protomartyr, and Venerable Mother Ignacia del Espiritu Santo, founder of the Congregation of the Religious of the Virgin Mary.

Philippine National Artist Nick Joaquin suggested that the names might have been derived from the archaic spelling of the Tagalog term "binondoc" (modern orthography: binundók), or mountainous, referring to Binondo's originally hilly terrain.

The Spanish gave a land grant for Binondo to a group of Chinese merchants and artisans in perpetuity, tax-free and with limited self-governing privileges.

At the time the local Chinese outnumbered the Spaniards by twenty to one, and Spanish authorities feared that they would join the invading forces.

In 1605, a Fukien official issued a letter claiming that the Chinese who had participated in the revolt were unworthy of China's protection, describing them as "deserters of the tombs of their ancestors".

After the war and new development, most businesses began to relocate to the newer Zobel de Ayala family-led area of Makati.

During the financial crisis of the early 1980s under the presidency of Ferdinand Marcos, it had the moniker "Binondo Central Bank",[15] as the local Chinese businessmen engaged in massive black market trading of US dollars, which often determined the national peso-dollar exchange rate.