The proper foundation of Itatí as a town was by general Pedro Ferré, on 15 September 1825.

Despite its small size, Itatí is renowned throughout the country due to the massive displays of devotion to the local advocation of the Virgin Mary.

The physical center of these is the basilica (built in 1950), which preserves an allegedly miraculous wooden image of the Virgin of Itatí.

On her feast day, 16 July, thousands of pilgrims from nearby and faraway regions, and even from neighbouring countries, come to Itatí to venerate the Virgin.

The name Itatí comes from Guaraní, but there is disagreement as to its exact meaning; ita- undoubtedly corresponds to the Guaraní word for "stone" (appearing in a number of other toponyms, such as Itaipu), while the last part could refer to (moro)ti ("white") or tí [tɨ] ("nose").