In the 13th century, the Order of Calatrava chose Almagro as its centre of governance. Since then the town lived a period of prosperity: in the fourteenth century, the town had a wall and a parish church, butcher shops, granary, jailhouse, Town Hall and a castle. Enrique II of Castile allowed the city to organize two fairs.
In the 16th century, the Fugger family, known in Almagro as Fúcares, bankers with trade relations with Carlos I, got the exploitation rights of the mines of Almadén and Almagro. They built some manor houses and they also brought the appliqué lace and pillow lace (encaje de bolillos).
During the 16th and 17th centuries the population expanded beyond the city walls. Monasteries, convents, hospitals, churches and manor houses were built. The Franciscans built the Convent of Santa Catalina. The Augustinians, Jesuits, and Hospitalers also established in Almagro. The sale of church lands (desamortización) under Carlos III changed the fortune for Almagro.
During the 1950s, the Corral de Comedias was discovered and restored. The Town Hall and Plaza Mayor were also restored. After 1972 numerous buildings (churches, palaces, houses, and hermitages) were restored. Almagro became a center for the dramatic arts in the region, and the International Festival of Classical Theater (Festival Internacional de Teatro Clásico) was put on here.