Barangays San Jose, Matingbe, Jacques, Aurelio, Mahayahay, San Juan, Don Ruben Ecleo, Justiniana Edera, Sta. Cruz, Cuarenta, Wilson and Luna was separared from the original territory of Dinagat to form the new municipality of San Jose on November 15, 1989 under Republic Act No. 6769.
The town became a part of the province of Dinagat Islands in December 2006, when the province was created from Surigao del Norte by Republic Act No. 9355. However, in February 2010, the Supreme Court ruled that the law was unconstitutional, as the necessary requirements for provincial land area and population were not met. The town reverted to Surigao del Norte. On October 24, 2012, however, the Supreme Court reversed its ruling from the previous year, and upheld the constitutionality of RA 9355 and the creation of Dinagat Islands as a province.