On 25th February, 1881, Quellón was declared a harbor of refuge by decree of the president of the republic, but there is no information referring to the foundation of Puerto de Quellón as a city due to a fire in the first town hall.
The foundation coincides with the arrival of the Braun and Blanchard Company steamboat Chiloé , which brought the first machinery for the Sociedad Austral de Maderas in 1905. This company was later transformed into "Destilatorio Quellón S.A.", and ellaborated subproducts of distillation, such as acetone, charcoal, and methyl alcohol. During many years, this industry was the only one of its type in South America, and provided their employees with houses near the plant and stores to improve their performance, thus initiating the urbanization of the port of Quellón and the transfer of fishermen and public offices to the previous harbor, being this the reason why the original town is called Quellón Viejo. Years later, the society joined with new capitals and formed the Sociedad Explotadora de Chiloé y Destilatorio S.A., which implemented a remuneration system of their own, consisting in tokens that laborers exchanged in a grocery store of the company, or in other shops in the city.
The Company built a 5000 km long railway track, with engines that transported timber.
This prolific company decayed due to lack of a market, and finally disappeared in 1952.
The big earthquake and tidal wave on the south of Chile in 1960 also destructed Quellón, what caused most of the people living along the coastline to move to a higher part of the city.
Today Quellón is an important city that has grown very fast, with a considerable commercial and industrial activity, and with all the latest techology in services and communication required by a fishing and industrial city.