The origin of the modern town is connected to the Way of St. James, as a rest place for the pilgrims on their way to Santiago de Compostela beginning in the 9th century.

In the Codex Calixtinus Villafranca is mentioned as an intermediate stage between Rabornal and Triacastela.

In the late 12th century Alfonso VII of León gave the lordship of Villafranca to his sister Sancha.

In 1619 saint Lawrence of Brindisi was brought here after his death in Lisbon and buried in the Monastery of the Assumption, which still contains his spoils.

The costs of the original construction were paid by Gabriel Robles, a native son who got rich mining silver in Peru.