High tides in the late 19th century flooded Pacocha and the population moved to Ilo's actual location, adopting its current name.

Ilo was a port of call to the ships travelling from the east to the west coast of the United States via Tierra del Fuego.

However, the building of the Transcontinental Rail Road and the Panama Canal caused commercial activities to decrease and mostly steamships transporting goods between Peruvian and Chilean ports remained.

The copper smelting plant and a formerly state-owned refinery located 10 kilometers far from the city have contributed to a large amount of air and water pollution in the region.

Ilo is the southernmost of the three ports which comprise the Peruvian termini of the Interoceanic Highway which links the state of Acre, in the Amazon Basin in Brazil, across the Andes to the Pacific Ocean.

The main attraction is the Urban Center whose landmarks are: BoliviaMar is a narrow strip of beach located 17.5 km to the south, next to the coastal road that connects the departments of Tacna and Moquegua.