The first appearance of Panajachel in historical documents is in the memorial of Sololá. There is mentioned AHACHEL as one of the towns near the shore of Lake Atitlan. This document indicates that in 1579 the Spanish people tried to use a boat in water near Panajachel.
According to experts, the foundation of Panajachel was probably near the XVI century as the towns of Sololá and Santiago Atitlan. During that time the land near Panajachel was used by the villagers to cultivate fruits and vegetables, they also dedicated to fishing. There were 800 kaqchikeles living in town.
There were four towns directed by the Franciscan Monastery near Panajachel: Concepción Paquixalá, San Adrés Semetabaj, San Antonio Palopó and Santa Catrina De la Laguna.