The city is located at the intersection of Routes 5 and 41, in the south of the department, close to the borders with the departments of Flores to the southwest and Florida to the southeast. It is only 40 kilometres (25 mi) northeast of the city of Trinidad, capital of Flores department.
The town was founded on 12 October 1821, under the name of San Pedro del Durazno, as a homage to BrazilianEmperorPedro I, at a time when the territory of present-day Uruguay had been annexed to Brazil as the Cisplatine Province. It had acquired the status of villa (town) before the independence of Uruguay. On 13 July 1906, its status was elevated to ciudad (city) by Act No. 3041.