The first capital of Sao Miguel Island.

Vila Franca do Campo displays its municipal motto, Quis sicut deus?, on its flag and on its coat-of-arms. This Latin phrase means "Who is like God?" It is a reference to St. Michael the Archangel for whom the island of São Miguel is named; in Hebrew, the name, Michael, means "he who is like God".

Founded in the middle of the 15th century by Gonçalo Vaz Botelho, the settlement was elevated to the status of vila (town) in 1472; Vila Franca do Campo quickly grew into the largest settlement and administrative seat of the island of São Miguel.

The greatest tragedy to befall the Azores occurred on 20 October 1522, when a violent earthquake hit the area of Vila Franca do Campo, then capital of the archipelago and most important Azorean settlement. During the earthquake and subsequent landslide, 5000 people were killed, with then Captain-Donatário Rui Gonçalves da Câmara II escaping the tragedy: he was relaxing in his summer home in Lagoa at the time of the tragedy. Many of the residents were buried alive from a landslide and debris. Because of its destruction, the capital of São Miguel was transferred to Ponta Delgada, where the Captain-Donatário installed his administration in a residence near the Church of São Pedro. King John III eventually elevated Ponta Delgada to the status of city on 2 April 1546, attracting more and more economic activity and settlement.

In the sequel of the 1582 naval battle off the coast of São Miguel, the Spanish victors had several hundred French and Portuguese prisoners executed in the town.

The town began to prosper again from the 18th century onwards from orange plantations, and later, from pineapple production.