Some say that the word must have been derived from the Bicol term "libong" or "ribong", meaning puzzled, dizziness, losing one's sense of direction, or becoming oriented.

The more popular and perhaps more plausible version is the claim that Libon originated from the Bicol term "libong" or "ribong", and there is a story which seems to support this view.

The story goes that Captain Juan de Salcedo and his men arrived in this place, by sailing across Lake Bato and entering the river called, Quimba.

'[6] Travelling through the northern passageway, Salcedo had first arrived in the region in 1571, shortly after his uncle's (Miguel Lopez de Legazpi) seizure of Manila.

Legazpi had ordered his nephew to subdue the area around Manila and in the process Salcedo heard rumors that "somewhere beyond the mountains of southern Luzon was a place called Paracale with its fabulous gold mines.

"[6] It appears from the accounts about the finding of Libon that this town occupies a prominent place in the history of the Bicol Region for two main reasons.

First, it is the first settlement for Spaniards established in the Bicol Region, and by no less than Captain de Salcedo, recognized as the Spanish "Conquistador" of this part of Luzon.

Second, Libon, during the early days of the Spanish conquest of Bicolandia, also served as the starting point for the organized propagation of the Christian faith in this region.

The topography of Libon is generally characterized as plain to undulating; extensive alluvial floodplain on its eastern flank, gently rolling to sloping uplands and steep mountains on its central western parts.

Libon, being in Albay's lowland zone down to Lake Bato, is suitable for rice production, freshwater fishpond and crops.

The area has a slope of not more than 8 percent and elevations not exceeding 100 meters above sea level and is generally of low soil permeability with no significant limitations of rock.

Libon, along with Oas and Polangui are medium-sized towns considered as rice granary municipalities endowed with plenty of agri-based industries.

In 2015, Libon, with its 30 coconut-producing barangays accounting for 10,894 hectares of land, produced 500,938,608 tons of coconuts, the second highest in Albay after Ligao City.

Settlement expansions are developed in areas with new opportunities like employment, trade, education, accessibility and other socio-economic sectors that have direct benefits to the people.

Bonbon of Libon is a convergence area of traders and producers coming from Albay's West Coast and Bato of Camarines Sur.

Activities include the parade of carabaos dressed in festive costumes, pulling carts adorned with decorations, usually the town's agricultural harvests.

Libon has natural bounties, sceneries in both terrestrial and aquatic, and rich history, culture and cuisine which, if managed efficiently and responsibly, could generate economic boom through livelihood opportunities to the Libongueños.

Moreover, Libon is part of both the Ticao-Burias Pass Protected Seascape (TBPPS) known for its rich marine life and biodiversity, as well as that of the Albay UNESCO Biosphere Reserve.

Pantao, which was one of the biggest shipyards back during the Spanish colonization of the country, is the site of the Bicol Regional Port, said to be a major economic driver for Libon for being a gateway to the Visayas and Mindanao.

Macabugos, a coastal barangay, is an emerging agri-tourism site in Bicol for its grape farm/vineyard, owned by Villa Miranda Farm and Resort.

The National Museum of the Philippines is set to conduct archeological survey in some of the caves for potential artefacts that could link the legend of Asog, the enchanter-protector of the mountain to the way of life of ancient natives.

Buga, a barangay situated at the banks of Lake Bato, is a potential eco-tourism area for activities such as boating, bird-watching and fishing.

Some of noteworthy addition to points of interest and potential tourism sites are the Bulusan River Promenade which has served as venue for boat racing during town festival, mangrove sites in the several coastal barangays, multi-species hatchery facility in Rawis, the Libon Business, Recreational and Institutional Center (LBIRC) at Barangay Zone 1, unexplored caves and falls in Molosbolos, the site of the proposed Pantao People's Park, the Libon Macapagal Gymnasium, Rizal Park and several spring resorts in Big Five barangays.

Bonbon, a strategic barangay for commerce and trade, houses a local market where handicrafts such as those made of abaca, buri, agas or water lily, and other indigenous hemps and fibers are sold.

For excursionists with limited time or energy for a whole-day itinerary, Poblacion will be a good trip for local history and wonders.

For faith tourism, the Saint James the Greater Parish Church at Barangay Zone 4 is Libon's main religious thoroughfare.

The home of Santiago el Mayor, Libon's patron saint, the St. James the Greater Parish Church reminds both the visitors and natives of Libon's of the town's opulent past as one of the oldest settlements in the Philippines, being founded in 1573 as a Spanish citadel with its former name, "Villa Santiago de Libong", and of its significance in the propagation of Christianity during the early phase of the Spanish occupation of the country.