Loreto is located on the east coast of the Baja California Peninsula, at 26º00'46" N 111º20'36" W. It is bordered on the east by the Gulf of California, on the west by the Transpeninsular Highway, and on the south by the Arroyo Loreto, a dry creek bed that only fills with water after a heavy rainfall. The city is built on relatively flat land with an average elevation is 10 meters (33 ft) above sea level. “La Giganta” Mountain Range (“Sierra de la Giganta”) lies to the west, extending along the center of the state of Baja California Sur, parallel to the gulf coast.
The city is a tourist resort, catering mostly to U.S. travelers, with daily flights from the U.S. state of California to Loreto International Airport. Many American tourists enjoy fishing in "pangas" for "dorado" (Mahi-mahi or Dolphin Fish). Local restaurants will willingly prepare the daily catch of the tourists. Loreto has a museum that coexists alongside the historic, but still active, parish. Loreto has active sister city relationships with the California cities of Hermosa Beach, Cerritos, and Ventura.
Loreto was the first Spanish colonial settlement of the Viceroyalty of New Spain on the Baja California Peninsula.
The town was founded in 1697 by Jesuit missionaries, who found a steady spring of fresh water on this site, as the Misión Nuestra Señora de Loreto. The Jesuits were expelled in 1767, and control of the Baja California missions was given to the Franciscans. In 1769, the Franciscans were ordered to turn over the Baja missions to the Dominican order and accompany the expedition of Gaspar de Portolà to establish new missions in the unexplored northern frontier that became Alta California. The expedition departed from Loreto on March 24, 1769.
The town served as the capital of the province of Las Californias from its founding until the capital was moved to Monterey on February 3, 1777. In 1768, the province had been split into Alta California (today's U.S. state of California) and Baja California. At first, the two provinces continued with a single governor. Later, the town became the headquarters for the Lieutenant Governor of California Viejo (the province of Baja California).