According to the historical records of Alonso de Ercilla, Cauquenes was originally inhabited by an indigenous community of the Promaucaes, known as the Cauqui by the Inca or cauquenes by the Spanish and that gave their name to Cauquenes River. They lived to the south of the Maule River and north of the Itata River and owned a settlement in the place where the city lies today. The city of Cauquenes was founded on May 9, 1742, de "Villa of Nuestra Señora de las Mercedes de José de Manso del Tutuvén", in the land located between the rivers Tutuvén and Cauquenes, that the Promaucae cacique (chieftain) Ascensio Galdámez and his wife Micaela de Araya donated to the Kingdom of Spain. Cauquenes' founder was the then Governor of the Kingdom of Chile, José Antonio Manso de Velasco. The name of the city changed with time. With the law of 20 August 1826, which created the Maule Province, it became called "Villa de Cauquenes", and finally on 22 December of that year, it acquired the title of "Cauquenes".

Cauquenes is a toponym from the term "cauque", a salmonid species extinct today that inhabited the rivers of the area.

Cauquenes was damaged by the 8.8 magnitude earthquake and subsequent tsunami. Restoring power in the city in the immediate aftermath was impossible because of damage from the tsunami.

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