The horses of South America descend from Andalusian and other Iberian stock brought to the western hemisphere by the Spanish.

In the southern part of the continent, significant numbers of these horses developed within geographically isolated conditions and by the mid-nineteenth century there were some small, inbred animals in the herds of Mapuche of southern Buenos Aires province in Olavarría, Argentina.

[4] The Falabella was originally developed in Argentina from local horses of Criollo stock, beginning in 1868 with the breeding program of Patrick Newtall.

[5] Falabella foals are very small, standing around 30 to 56 cm (12 to 22 in) tall at birth, and maturing to their adult height by the age of three.

Black or red leopard-spotted Falabellas (resembling, but not the same as the Appaloosa horse breed) also exist, but are not common.