Before the Spaniards came in 1587 AD Binalatongan (original name of San Carlos) was (trading barter system) with Chinese, Japanese, and Indian traders along its riverine settlements like Mabalbalino. The Spanish friars who came to Binalatongan were surprised that the natives were wearing gold jewelries and had a well developed agriculture.
Binalatongan soon became the center of development because the Spaniards introduced European culture particularly Spanish culture which at that time was being copied in Europe, in the Americas, and now its recent colonies in the Philippines. From the time of its founding up to the middle of the 19th century Binalatongan composed a whole third of the province and was recorded as a bastion of freedom fighters and uprising against the Spanish colonizers. Heroism was exemplified by native born heroes like Don Andres Malong in 1660 and Juan de la Cruz Palaris a hundred years later in 1762 who drove out the Spaniards from the province of Pangasinan albeit for two brief years.
Deeply embarrassed by these rebellions King Carlos III of Spain ordered the Spanish rulers to raze the town of Binalatongan to the ground and changed its name to San Carlos when they moved it to its present site.
Binalatongan during the height of its popularity served the Dominican Fathers as the center of their annual provincial chapter and because of this it was mistakenly referred to as the capital of Pangasinan. It had the largest church in the province which was equipped with the biggest and most sonorous church bell in the country. The pride and joy of Binalatongan belfry was irretrievably lost when the big raft carrying it to the new site staggered under its weight and sank to the bottom of the San Juan River. According to local legend it lies at the bottom of the river guarded by a “mermaid”.
San Carlos, considered since Hispanic times as biggest and most populous town of Pangasinan, became a city by virtue of R.A. No. 4487 signed June 19, 1965 which was sponsored by Congressman Angel B. Fernandez . After overwhelming ratification by the residents, San Carlos became a city in January 1, 1965.