The monastery had its origins in the late 13th century, when a shepherd from Cáceres, named Gil Cordero, discovered on the bank of the Guadalupe River a statue of the Blessed Virgin,[1] which had been apparently hidden by local inhabitants from Moorish invaders in 714.

After gaining the victory, he ascribed it to the Madonna's intercession, declared the church at Guadalupe a royal sanctuary and undertook an extensive rebuilding program.

King Ferdinand II of Aragon issued the Sentencia Arbitral de Guadalupe at the monastery on 21 April 1486, thus effectively ending the onerous evil customs allowing medieval nobles in Catalonia to maltreat the remensa peasants and tie them to their lands.

In the 20th century, the monastery was revived by the Franciscan Order and Pope Pius XII declared the shrine a "Minor Papal Basilica" in 1955.

Behind the basilica is Camarin de la Virgen, an octagonal baroque structure (1687–1696) with the stuccoed Chamber of the Virgin and nine paintings by Luca Giordano.