On August 20, 1878, Filandia was founded by Felipe Melendez, Eliseo Buitrago, and others, as a settlement of Colombians escaping the misfortune faced by the rest of the nation at the time.

The road the first settlers used to populate the town lost its importance due to the construction of a highway to the east connecting the capital of Risaralda and the capital of Quindío, isolating the town and providing a more direct alternate route to goods and services that previously were obliged to pass through Filandia.

The town is located on the west slope of the Cordillera Central of the Colombian Andes, on the Alto Cauca basin and the Rio La Vieja sub-basin.

The total territory of the municipality extends from the foot of the Andes to the plains of the northern Valle del Cauca department.

The town's best-known tourist attractions are its "mirador" (viewing tower) with its extensive views over the Cauca River valley to the west and the Parque Nacional Natural los Nevados to the east (it's also possible to see both Armenia and Pereira from the top of the tower), and the cafe in the main square where scenes from the popular Colombian telenovela Cafe, con aroma de mujer were filmed.