There are two different versions for the origin of Alagoa. On the one hand, some say the town was founded around 1710 by pioneer Simão da Cunha Gago and Father Joaquim Mendes de Carvalho and, on the other hand, others say the village appeared in 1730, with the opening of the chapel for Nossa Senhora do Rosário da Alagoa de Aiuruoca.  What is known is that the village belonged to the towns of Itanhandu and Itamonte and became independent on December 30, 1962.

The town has many natural attractions, such as waterfalls formed by the Aiuruoca river. This river also forms numerous waterfalls and rapids in the Papagaio State Park, a place where nature is  generous and where one can find species of the Atlantic Forest. However, to further explore the region’s natural resources, visit the Garrafão, where the Jesuits used to explore gold. The area has tunnels carved through rocks, streams, abundant vegetation and is filled with legends and stories. The site is considered a mystical place by locals.