The town was established in 1847 to be settled primarily by German immigrants from the Hunsrück region of southwest Germany.

The local language was Riograndenser Hunsrückisch for most of its history, and it is still spoken there after 150 years of the initial settlement.

Today, however, Portuguese prevails, mostly as a result of the campaign of the "Nacionalização" (Nationalization) forcefully imposed on all German and Italian settled areas of southern Brazil by president and dictator Getúlio Vargas in the 1940s.

Cardinal Cláudio Hummes, one of the candidates to the Catholic Church papacy in April 2005, was born in the area.

On July 2, 2008, Pope Benedict XVI erected the new Roman Catholic Diocese of Montenegro, making it a Suffragan See in the province of the metropolitan archdiocese of Porto Alegre, from whose territory it was taken.