Cañazas was founded in 1757 under the name of San Francisco Javier de Cañazo. Since the Spaniards established the custom of naming the places they arrived, the named the town after the saint on arriving on 3 December, which is the feast day. It is assumed that the name of Cañazo arose from the surrounding mountains. The first school was established in Cañazo in 1853.
In 1783, Indians attacked and devastated the population of Cañazo and other peoples of Veraguas Province and Chiriquí Province. In 1912, they constructed the tower and temple, with much work carried out by Juan Bautista Brea. Today, there is a new tower and a church completely restored after the fall of the old tower. On August 16, 1963 the Pan-American Highway established links to Cañazo. On December 28, 1971, General Omar Torrijos Herrera signed the contract for the construction of an asphalt road to Cañazo. On May 11, 1974, it was opened by Demetrio Basilio Lakas, and the minister of public works of that time, Edwin Fabrega. The honor of cutting the ribbon was awarded to Peter J. Mérida, a distinguished citizen of the district of Cañazo.