The resort town of Cabo San Lucas, named for the slender cape extending eastward from Baja's southernmost tip, gradually developed into a tourist hot spot in the last forty years. During the Spanish colonial era, its natural harbor was periodically used by passing mariners, but since it offered no source of fresh water and scant protection during the late summer storm season when chubascos rolled in from the southeast, it was largely ignored by the Spanish. Many of the historical incidents ascribed to Cabo San Lucas may have actually occurred near present day San Jose del Cabo, where ships often watered at the Rio San Jose estuary.

By the 1930s, a small fishing village and cannery occupied the north end of the Cabo San Lucas harbor, inhabited by approximately 400 hardy souls. The cape region experienced a sportfishing craze in the 1950s and 60s. Due to the prolific billfishing, the waters off the peninsula's southern tip earned the nickname "Marlin Alley". Fly-in anglers and wealthy pleasure boaters brought back glorious stories of this wild place which fueled population growth to around 1,500 by the time the Transpeninsular Highway was completed in 1973. Following the establishment of the paved highway link between North America and Cabo San Lucas, the town transformed from a fly-in/sail-in resort into an automobile and RV destination.

The establishment of a water pipeline between San Jose and San Lucas further loosened the limits on development. Los Cabos, as the area became known, stretched from Cabo San Lucas through the Resort Corridor 20 miles to the northeast to San Jose del Cabo. Today, Los Cabos is booming. It is currently the seventh most popular tourist destination in Mexico and the second-fastest growing resort community in the country.