The municipality was created in the beginning of the 20th century, when two northern parishes of the older Municipality of Santa Catarina were split off to become the Municipality of Tarrafal. In 1991, a southeastern parish of the Municipality was split off to become the Municipality of São Miguel.
Tarrafal has various sights to offer. There are an interesting town hall, a market hall and a comparatively large church, Saint Amaro Abade, in the market place. Every year Tarrafal invites everyone to celebrate the name festival (Festa de Santo Amaro). The date is January 15.