Balneario is the Spanish word for spa resort, referring the host-medical establishment that had provided the necessary economic strength to support its emancipation from Mondariz.

Thus, the history of Mondariz-Balneario is closely related to Don Sabino Peinador Enrique Vela, who made the aforementioned neighborhood Troncoso renowned spa, thanks to which appeared the town.

Since April 17, 1925 the town of Mondariz-Balneario holds the title of "Very hospitable villa" granted by King Alfonso XIII and General Primo de Rivera in thanks to good treatment received from the neighbors in their frequent visits to the Grand Hotel.

The Grand Hotel, that opened in 1898 and hosted very important guests in the early twentieth century, started its decline after the Spanish Civil War.

In 1973 a devastating fire destroyed the Grand Hotel and left the building in ruins until 2005, when it was rebuilt to house private apartments.