Ferragudo was traditionally a fishing village. At the beginning of the 20th century, the town experienced an upswing through settled fish-canning factories. These became increasingly unprofitable over the years due to a lack of further development and closed increasingly. Since the 1970s, then began by the emerging tourism, a renewed upswing. The town now lives mainly from tourism and the work of many of its inhabitants in nearby Portimão.
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Finds document the settlement of Ferragudo in prehistoric times, later by Phoenicians, Kartagher and Romans. Since there are no meaningful documents of a Moorish settlement, the first records of the present-day site date back to the 14th century, in which settling fishermen are reported.
Between 1502 and 1537, the bishop of Silves had the castle built. In the 18th century, the town was further developed by fishing and agriculture from the community Estombar dissolved and declared in 1749 to a separate municipality. On June 30, 1999, the place was raised to the rank of a small town ("Vila").
Towards the open sea and opposite the town of Portimão, in the estuary of the Arade river, the houses of the old fishing village of Ferragudo throng the hill.
Definitely recommendable is the restaurant "Fim do Mundo" in Ferragudo. The price / performance ratio is excellent and an impressive constant.