Sagay was originally called Argüelles when Lt. Francisco Rodríguez and Basilio Córdova founded it in 1860 in the mouth of the Bulanon River.

Later, by the order of the Spanish governor the town was transferred[clarification needed] to Pueblo de Magallanes (now known as Old Sagay) in honor of Ferdinand Magellan.

At this period of Sagay's history, land transportation began to supplant sea travel, but the seaside community continued to flourish.

A major industrial development gave Sagay another big step forward: the establishment of the Lopez Sugar Corporation in the 1920s.

The sugar boom brought the "old families" into the industry like the Pueys, the Nichols, the Katalbases, and the Tupases, which branched out to the Marañons, the de la Pazes, the Ibrados and the Libo-ons.

Their term however, abruptly ended when the combined Filipino and American forces liberated the province from the Japanese at the early part of 1945.

It also served as the headquarters of Fourth Flight Division of the Japanese Imperial Air Force whose airfield was located in Pula-Bunglas area in Barangay Malubon.

During the last days of the war, the Fourth Flight Division of the Japanese Imperial Airforce organized kamikaze or suicide units to be stationed here and in Bacolod.

The Iglanggam Bridge at Barangay Tadlong served as the dumping site of executed local soldiers, guerrillas and civilians.

This is also known as the site where confiscated money, especially silver Peso coins encased in concrete blocks, were dumped by the retreating Japanese soldiers.

Balibag Hill, Lopez Jaena was the place where the seat of the resistance government of Free Sagay under Mayor Londres was established.

At Barangay Poblacion II, Japanese zero fighters left bullet holes when they intended to destroy the water supply of the people during the last days of the war.

A training site of USAFFE (United States Army Forces in the Far East), under the supervision of Lt. Dominador Gaerlan, was established at Tangnonon, Barangay Fabrica at the ancestral home of Lopez Kabayao.

Incidentally, the transfer signaled the diminishing importance of sea travel and the takeover of overland transportation as the conveyor of progress and development.

The transfer was made possible partly through land donations for the town site by Doña Rosario Cooper and the heirs of Clayton Nichols.

In the late 1950s, two Sagaynon politicians were in the forefront of Negros politics, Jose B. Puey Sr. (Congressman from 1953 to 1957) and Alfredo E. Marañon Sr. (board member from 1956 to 1959).

More roads and school buildings were constructed, thousands of hectares of logged off area of the Insular Lumber Company were planted with coconut trees and sugarcane.

The growing markets for sea products brought about unprecedented boom in the fishing industry for which the coastal waters of Sagay proved to equal the demand.

It was during this time that Alfredo Marañon Sr. began entertaining the idea of putting up another sugar mill in Sagay which farmers can partly own.

The then Mayor Alfredo G. Marañon Jr.'s successful negotiation of the sponsorship contract with the German District Osterholz is his most important achievement.

It was the largest sitio of Barrio Vito and contributed a huge income because of its lime quarries and vast land area.

The separation of Andres Bonifacio from Vito was materialized through land donation of the barrio and school sites by the family of Carlos and Elea Canoy-Esperancilla.

There used to be a place called “tabu”, where people from the hinterlands meet for recreation like cockfighting (“tari”) or horse fighting in a clearing area near the Himoga-an River where a big rock (“bato”) was a landmark.

Before the Second World War, tall big trees were cut down by workers of the Insular Lumber Co. for it was under the concession with the Philippine Government.

The known history of Barangay Bulanon started sometime in the year 1880 when the Spanish conquistadores first founded a settlement of non-Christian Filipinos near the twin big rivers.

With his leadership, the PTA passed a resolution requesting the local government of Sagay to release a donation of four hectares of land for the school site and public plaza.

In 1957, Retired Reverend Dr. Roberto G. Mahilum, who was called Master and Father and Founder of a Trinitarian Religious Organization, legally known as the ALAPH DIVINE TEMPLE, duly established and organized in accordance with the laws of the Republic of the Philippines, teaching the doctrine of the Holy Trinity, ventured himself together with a group of his adherents and settled in the vicinity of Barangay Campo Santiago which they called Colonia Divina.

The recorded history of Barangay General Luna started in 1929, when the Insular Lumber Company began its logging operation in the area.

They donated portion of their cleared land to the government for the barrio and the school site, Later they named the new barangay after General Luna, one of the prominent Filipino heroes.

From that time on, the place bore the name Molocaboc and is now noted for various species of mangroves lining its coast and of bubble shell deposit The recorded history of Sagay dates back to the 1860 era when Teniente Francisco Rodriguez and Basilio Cordova founded a small settlement in the mouth of a river known as Bulanon River.