By the first quarter of the 18th century, the municipality of Madalena was already entrenched in the "wine cycle" which had multiplied the riches of its landowners and increased the desire of local settlers for emancipation from the Captaincy of Faial.

The introduction of grapes to the island had occurred almost immediately with the first settlers, along with the cultivation of wheat and production of wine and olive oil (that were staples of the traditional Mediterranean Christian culture at the time).

The uniquely Piquense culture of grape growing on the ground, or in volcanic rock patches, allowed the establishment of an industry and opened new markets for products originating in Madalena.

The growth of wine exports from Pico elevated the neighboring town of Horta to the status of municipality, since all international shipments were made from the island's sheltered port, creating a socio-economic disparity between the disenfranchised Piquense "workers" and the entrepreneurs/landowners from Faial.

In fact, Father Gaspar Frutuoso and Friar Agostinho de Montalverne certified that the colonists in Madalena had tripled by the 17th century; in 1587, there were less than 3000 inhabitants and around 9000 by 1695, forcing the remodelling of the local church.

In the 20th century, the dairy industry continued the boom and bust cycle, while ecotourism centered on Pico and the histo-cultural nature of the island developed after European integration.