In 1883, more precisely on February 27, part of the army that had occupied the area known as Araucanía, moved towards the territory of Pucón. With the clear aim of controlling the mountain pass, the military group resolved to settle some barracks in the eastern part of the square that still stands at this district.
Such settlement gave origin to Pucón, which little by little began to be populated by German merchants who worked with leather and wood. Some of the most outstanding family names were Hike, Martín and Holzapfel, and later on Ansorena, Quezada and Matus.
In 1904, the government of Chile resolved to license this territory in favor of an entrepreneur association from Santiago de Chile. Around twenty German families arrived to settle down in the area known as Llafenco.
The first nations -the Mapuches- were pushed to the areas of Palguín Bajo, Curarrehue and Quelhue. This action was known as "Reduction Regime".
For many years, the main activity in Pucón was related to wood and livestock.
In 1934, the tourist industry experienced its first boom with the inauguration of Gran Hotel Pucón. Its luxury and services lured guests who came by train to Villarrica and then crossed the lake by boat and landed at the hotel pier.
Also as from the 1930s, Pucón was chosen as the ideal site to practice angling. In 1945, Hotel Antumalal was opened. This place was chosen by anglers, artists and intellectuals, who provided the city an exclusive imprint.
Mass tourism began in the 1970s, after roads were opened towards Lake Caburgua, Huife, Curarrehue, Puesco and Lican Ray. Today, Pucón provides a wide array of lodging options to be enjoyed year round.