Tecate's history began in 1831 when a Peruvian named Juan Bandini obtained a land concession of 18 square miles from the Government of California. At this time, all of California was still part of Mexico. Bandini founded the town of Tecate two years later but he did not named his town Tecate. His name of the town has been left out of the history books, but by the mid-19th century people were calling it Tecate, although no is exactly sure how Tecate got his name.

One story is that after the Mexican-American war ended in 1948 and California became part of the USA American ranchers used to sneak across the border to cut firewood. Tecate sounds like "TO-CUT" thus, the name's origin. Another more likely story is that the word Tecate came from "Valle de Zacate".
For most of the 19th Century Tecate remained out of the history books. It brefly gained notoriety in 1911 when a band of renegades took control of the town from the Mexican Government.
Then, in 1943 Mexican businessman Alberto Aldrete jolted the town into the industrial age by establishing a brewery near the Tecate River. The brewery has since become the principal source of jobs and income of the Tecate people.