Callosa borders the municipalities of Altea, Bolulla, Guadalest, Xaló, La Nucia, Polop and Tàrbena.

The origin of Callosa (meaning probably "land hard, dry" in Latin) is an ancient Muslim farmhouse, after the Christian reconquest by the king James I of Aragon in the 13th century, the property was acquired by Admiral Bernat de Sarrià in 1290 during the reign of Alfonso III of Aragon, becoming its first feudal lord.

Hence, since then the city was renamed Callosa d'en Sarrià and became the center of the manor, which extended over part of the current district of Marina Baixa.

Afterwards it was acquired by different noble families and other entities, among which were the Sarrià (1290–1335), the Crown of Aragon (1335–1445), the Bou (1445–1560), the Moncada (1560–1767) and the Count of Orgaz (1767).

The city retains the old town part of its medieval urban structure, bounded by a line of walls of the intramural Callosa, which still can be entered by one of its original gates: El Portal.

[4] Callosa has a highly competitive agriculture based on loquats and medlars, introduced in Spain in the 19th century by the Callosan Juan Bautista Berenguer y Ronda.

Farmers are partners in a cooperative that handles the marketing of fruits, intended mostly for exporting; their main destinations are France and Italy.

The Algar waterfalls form a natural park with an elevated grade of conservation of the ecological richness, and at the same time it has tourism and environment education services.

The first information about the castle dates from 1322, when Infant Don Pedro was given it by Bernat de Sarrià, Lord of Callosa, who might be the builder.