On 26 January 1500 the Spanish navigator Vicente Yanez Pinzon, who had captained the Nina on Columbus's first crossing, brought his ships to anchor in the inlet at Suape. He named the headland Cabo de Santa Maria de la Consolacion. That was three months before Pedro Alvares Cabral made landfall further south on 21 April - the arrival Portugal recognises as the discovery of Brazil. Spain never pressed the claim. The Treaty of Tordesillas had already drawn a line through the Atlantic, and this coast fell on the Portuguese side of it; a Spanish captain's flag here was worth less than the parchment in Lisbon. On 28 August 1501 a Portuguese expedition under Goncalo Coelho renamed the cape for Saint Augustine, whose feast day it was, and that is the name that stuck.

Colonisation began in earnest in 1536 under the donatary captain Duarte Coelho Pereira, and within a generation the answer to what this land was for had been decided: sugar. By the 1570s cane dominated the economy, worked by enslaved Africans and Indigenous people whose labour built every fortune the captaincy produced. Sugar wealth invited attention, and the coast was fortified accordingly. At Nazare point stood the fort later known as Forte Castelo do Mar, guarding the approaches during the Dutch invasions of 1630 to 1654 and playing its part in the Pernambucan insurrection that eventually pushed the Dutch out. Nearby, the ruins of the church at Nazare still stand above the sea - roofless walls with the Atlantic behind them, which is a more honest monument to the period than anything intact would be.

The settlement was raised to the status of vila in the early 1810s, given city status on 9 July 1877, and finally settled on its present name by municipal law on 19 May 1994. Today the municipality covers about 445 square kilometres and holds a population of 203,440 as counted in the 2022 census, with recent estimates pushing past 218,000. Its human development index stood at 0.686 in 2010 - the medium band, and a number that reflects the split personality of the place. Cabo de Santo Agostinho contains both refinery flare stacks and nature reserves, both container gantries and fishing villages, and the distance between those two economies is often only a few kilometres of coast road.

The industrial and port complex at Suape, established from the late 1970s, straddles the boundary between Cabo de Santo Agostinho and neighbouring Ipojuca, about forty kilometres south of Recife. Its advantage is the one Pinzon noticed in 1500: the inlet is naturally deep and sheltered, and the port can work ships every day of the year without waiting on the tide. That single fact turned it into one of the most important harbours and container terminals in the Brazilian Northeast, and in the twenty-first century it has become the principal engine of Pernambuco's economy, drawing shipbuilding, petrochemicals and heavy manufacturing to a coast that had spent four hundred years growing cane.

The other half of the municipality is a shoreline that people from Recife drive south for. Paiva has warm clear water, Atlantic forest behind the dunes and small tidal pools between the rocks. Itapuama runs two kilometres and draws water-sports crowds and fishermen. Xareu is deep enough for diving, its sand mixed with volcanic rock. Enseada dos Corais - coral bay - is protected by natural reefs and stays gentle. Gaibu is three kilometres of high surf with hotels and bars along it. Calhetas hides between rocks and coconut palms and is a favourite with spearfishermen. And then there is Paraiso: thirty metres of sand wedged between boulders, almost completely shielded from waves by the reef, and named heaven by people who had clearly done their research on the alternatives.