In 1855, one year after the city of Nueva San Salvador was founded, Colonel León Castillo started constructing a church dedicated to the Lady of El Carmen. León Castillo had been active in armies under the command of General Francisco Morazán. Records refer to him as a courageous soldier. His military career had been characterised by his commitment to liberal reform, something illustrated with his involvement in the expulsion of religious orders from El Salvador and the expropriation of churches since 1829, which is the year in which the liberal revolution began in Central America. The legend says that in 1840, León Castillo was injured during combat in Guatemala and managed to crawl to Iglesia El Carmen del Cerrito, where he promised to the Lady of El Carmen that if she saved his life, he would work his whole life to propagate her faith and he would build a temple for her. He was taken care of by the priest Antonio Larrazabal, and he lived in the temple for almost two years. Colonel Castillo was instructed in Catholic faith and sciences, before he finally could return to El Salvador.
The construction of the church was conducted in very specific phases, many of which are attributable to the priest in charge of the church at a given time.
León Castillo fulfilled his promise of reconstructing the chapel of Our Lady of El Carmen in the Church of la Merced in San Salvador after the earthquake of 1854. When a new capital was established in Nueva San Salvador after this earthquake, León Castillo decided to erect the church of his dreams in the new city.
Bishop Miguel Pineda and Saldaña and León Castillo chose a location for the church in the north of the city, near the Belén school. The construction of this chapel started August 9, 1856. When the construction was well under way, León Castillo received an image of the Lady of El Carmen from Luis Batres, a friend who lived in Guatemala. This image was blessed and placed in the modest church by April 11, 1860. This building did not end up becoming Castillo's dream temple. He would have to wait and work hard to secure a larger piece of land elsewhere in the city and also obtain the necessary funding to build the church he wanted.