Lallo has a rich historical background. During the early part of the 16th century, Lallo was the hub of religious, trade and commercial activities of Northern Luzon. One of the first four cities in the Philippines (others were Manila, 1571; Cebu, 1565; Naga, 1575), Lalloc, old name for Lallo, benefited and enjoyed the gifts from the Papal Throne. Named Nueva Segovia by Juan Pablo Carreon in 1581, the town was the seat of the Diocese on August 15, 1595 following the order of Pope Clement VIII, until it was trasferred to Vigan, Ilocos Sur in 1755, and it was the capital of Cagayan up to 1839 when the provincial government was moved to Tuguegarao. Very famous among the missionaries at that time was Bishop Miguel de Benavides, O.P., the first bishop elected to the Diocesan home of Nueva Segovia. He later founded the University of Santo Tomas.
In those years, Lallo had three parishes. The parish of the Cathedral was served by the Seculars up to 1786. This was located in the "Centro" where the present Santo Domingo church now stands. The parish of Bagumbayan was entrusted to the Dominicans by Bishop Diego de Soria in 1613. The third, the parish of Tucalana, also under the Dominicans, was located in the present site of the "Compania Tabacalera," the ruins of which were used by the said company as foundations for their buildings and warehouses.
The Tabacalera (Compaņa General de Tabacos Filipinas) which was founded in 1881, played a vital role in the economy of the town. This firm had developed the Philippine Tobacco and stabilized the Philippine economy.
During the last World War, Lallo was made the central office of the "Gunmai" (Naric) which was controlled by the Imperial Army of Japan. The big warehouse and buildings of the Compaņa Tabacalera were used by the said Japanese-controlled corporation as offices, bodegas and arsenals. These were all destroyed when the Unites States Air Force bombed the town on January 6, 1945.
After the war, her inhabitants worked hard to make their historical town retain the lustre and prestige it enjoyed during the Spanish regime. Lallo has been known also as the only town in Cagayan where clams (cabibi) abound. This is one of the source of income to many of its town people.
Some of the historical and interesting spots which is still existing today is the "cotta," a kind of fortress similar to the walls of Intramuros.