Before the Spaniards came to Negros, this town was a wilderness and local indigenous people dwelling there depended on hunting and fishing.

In 1822, Cauayan was formally founded by Don Vicente Paulo Decena, believed to have come from Cebu.

The inhabitants of Cauayan were taught modern agricultural techniques to raise crops, and public infrastructure such as schoolhouses, roads and bridges were built.

Cauayan is 111 kilometres (69 mi) from the provincial capital of Bacolod and is known for its sandy beaches and pristine waters, limestone and dried fish products.

The remaining portions of the municipality are slightly rolling to moderate large areas of flat lands center on the different barrios, which is much suited to agriculture.

A bigger portion is moderately steep with a slope distribution ranging from 18 to 30 percent having a total area of 19,419.42 hectares.

Danjugan Island Marine Reserve is a wildlife sanctuary in Barangay Bulata is also one of the most recognized dive spots in the region.

The main concern of the Local Government Unit of Cauayan is the provision of adequate health facilities and services to its constituents.

Complementing the health services is the newly operated Cauayan District Hospital managed by the Local Government Unit located in Barangay Isio.

The municipality police force has a total strength of 28 members who maintain the peace and order and assist with emergencies.

Transportation facilities plying the route from the Kabankalan to the different barangays and vice versa are public utility jeeps with terminals in other growth centers aside from Poblacion.

Mailing services are mainly handled by the Bureau of Posts which is headed by a postmaster and two postmen.

The municipality is deficient in the point of piped potable water available for residential and commercial purposes.

In other barangays, household consumers pay a flat rate at a minimum of P10.00 per month while others operate their water system for free.

From these 62 elementary schools, 21 are located along the highway, some are near the seacoast, and the rest are widely scattered in the mountainous area of the municipality.

Students have competitively participated in divisional and regional conferences from these schools and honorarily brag awards.

To further provide the educational and/or tertiary needs of the Cauayanons, the Central Philippines State University has a campus in Cauayan (originally known as the Negros Occidental Agriculture College (NOAC) when it officially opened on June 8, 1999, and between 2001 and 2012, as Negros Occidental State College of Agriculture (NESCA) - Cauayan Campus).