The village was founded in 1860 by people from the nearby town (4.5 km east) of Concepción.

In 1887 population statistics Santa Fe was ranked as one of the municipalities forming the Ocotepeque Department.

[1]Located 11 km southeast of the border with Guatemala (at Agua Caliente), and 19 km north of the one with El Salvador (at Citalá), Santa Fe is a hilltown close to the banks of Lempa River.

The municipality is divided into 8 parts: the town of Santa Fe and 7 other villages (Aldeas).

The villages are Agua Caliente, El Mojanal, La Quesera, Los Encinos, Piedras Bonitas, Piñuelas and Sulnete.