Ilhéus began as a hereditary captaincy granted by the Portuguese crown in 1534. It prospered initially from brazilwood and later cocoa cultivation, becoming one of the richest captaincies in Brazil during colonial times. However, cocoa monoculture declined due to disease and market forces, leading Ilhéus to transition to subsistence farming and timber extraction. It was officially incorporated as a city in 1881 and today is known as the "Princess of the South" and a center of tourism and chocolate production in Bahia state.