The city is situated in Isla Pavón, discovered in 1520 by Juan Serrano from Magellan's expedition. In 1859 Captain Luis Piedrabuena settled in Isla Pavón near the present urban area. He built his house and some huts in 1868 when he married Julia Dufour , the first white woman who lived in Patagonia. The island was soon populated by families considered today to be the first permanent settlers. Some time later, Piedrabuena himself installed a factory to make commerce and barter with the aborigines, and called the place Isla Pavón in memory of Mitre's victory in 1861. Law 269, passed on 6th October 1868, granted to Don Luis Piedrabuena Isla Pavón, the small adjacent islands, and the salt marshes nearby.
One of Piedrabuena's pilots, Gregorio Ibáñez, settled on the northern margin, and that is the reason why this area is known as Paso Ibáñez.
In 1920, the first commitee was formed, and in 1933 the city was called Comandante Piedrabuena.