Ensenada was founded in 1882, when the small community of Rancho Ensenada de Santos was made the regional capital for the northern partition of the Baja California Territory. The city grew significantly with the proliferation of mines in the surrounding mountains. While the Mexican Revolution curtailed much of Ensenada's expansion, the onset of Prohibition in the United States transformed the city into a popular tourist destination for Americans seeking entertainment and alcohol. Ensenada's reputation as a resort town was cemented by the 1950s and 1960s, which saw a construction boom and the city's rise in international prominence outside of North America.
Bahía de Todos Santos, which Ensenada now borders, was first reached by sea by the Spanish explorer Juan Rodríguez Cabrillo on the vessels El Salvador and Victoria. The city was founded on September 17, 1542, under the name San Mateo. In 1602, while mapping the coast of the Californias in search of safe harbors for returning Spanish galleons from Manila to Acapulco, Sebastián Vizcaíno renamed the city to Ensenada de Todos Santos. The first permanent settlement was established by the Jesuits during the 17th or 18th century. After the expulsion of the Jesuits in 1768, Dominicans took over the representation of Europe in what is now Ensenada. In 1805, José Manuel Ruiz Carillo obtained permission to establish himself in Ensenada, being appointed governor of Baja California and building in Ensenada a house that survived until the final part of that century, despite being briefly taken by William Walker, in 1853–54.
In 1882, Ensenada was designated the capital of Baja California, and attempts at developing the area were made by the English Mexican Land and Colonization Company. These were interrupted by the Mexican Revolution, which left the area devastated. In 1915, the capital was transferred to Mexicali, and in 1930, the population of Ensenada was only 5,000. During the early part of the twentieth century, the city's name was shortened from Ensenada de Todos Santos to Ensenada, a change made in order to avoid confusion with Todos Santos in Baja California Sur.
The twentieth-century development of Ensenada was assisted by prohibition, which sent Americans and Canadians south of their border in search of entertainment and alcohol, developing first Tijuana, then Rosarito, and finally Ensenada as tourist destinations. The Hotel Riviera del Pacífico was opened in 1930, briefly placing Ensenada on the international glamor map and was visited several times by President Miguel Alemán Valdés, international artists and political personalities. Ensenada truly began to flourish in the early 1950s, at which time the city's population had risen to 20,000. The hotel finally closed in 1964. It was later reopened as a cultural center and museum. By this time, other hotels had opened, and the population and economy of Ensenada had grown and diversified towards their present status. On January 26, 2007, Pope Benedict XVI created the Roman Catholic Diocese of Ensenada with territory taken from the Archdiocese of Tijuana and Mexicali Diocese, making it a suffragan diocese of the Metropolitan Church of Tijuana. In 2023, ten people were killed in a shootout.
Ensenada is located some 108 kilometres (67 mi) south of the border with the United States, connected via a four-lane toll road MX-1D and a two lane free road, which makes it a natural destination for tourists on short vacations by car. Ensenada's proximity to California also makes it a destination for short cruise ship trips from Port of Los Angeles and Port of Long Beach. As of 2005, four cruise lines maintained ships that docked in Ensenada weekly, though, one of these ships, the Monarch of the Seas operated by Royal Caribbean International, ceased operations in the Pacific in mid-October 2008. The world-renowned Baja 1000 off-road race is held in Ensenada every year in late November, while the Baja 500 race is held in early June. Off-road enthusiasts use Ensenada year-round as a starting point to explore Baja California.
Watersports and ocean proximity have formed an integral part of the structure of tourism and its relation to economics in the city. Ensenada and coastal beach towns of Greater Ensenada have several renowned surfing spots, such as San Miguel Beach, California Trailer Park, Stacks and 3 M's (Tres Emes in Spanish), which are located on the north coast of the city. Todos Santos Island is a small island located west of Ensenada (about two hours by boat) and a world-famous surfing spot. A number of surfing contests, such as the Billabong XXL have been held at Todos Santos Island. Wave faces can reach above 18 metres (60 ft) on the island and in December 2006 Brad Gerlach, 2006 winner of Big XXL, surfed a wave of 21 metres (68 ft). Tourists also stop in the city on their way to their destinations farther south in the municipality where windsurfing spots are located. Maritime activities associated with the city also include the global Newport to Ensenada International Yacht Race, billed as the world's largest international sailing event, which begins in Newport Beach and finishes in Ensenada. SCORE International's Baja 1000 and Baja 500 desert races also traditionally begin and/or end in the city. Whale watching has also developed as a tourist draw in the city due to the gray whale's annual migration from Alaska to the lagoons of Baja California Sur. Between the months of December and March, and back in the months of April and May, whales can be seen from the coast of Ensenada.
Ensenada maintains no professional sports teams in association football, basketball, or baseball, but is known for its water sports. The city has sports fishing venues, and swells that are known for drawing professional surfers. A baseball team, the Marineros de Ensenada, play in the Liga Norte de México and have won five championships (2010, 2012, 2017, 2018, 2022). In addition to its watersports scene, the city is known for a place of biking, both cycling and motorsport varieties. The 80 kilometres (50 mi) Rosarito-Ensenada bike race ends in the city. The Baja 500, which starts and ends in the city, and Baja 1000 – both races that take their names from their distance in miles – are motorsport races that begin in the city. It is also the birthplace of the tennis player Raúl Ramírez and pro cyclist Isaac del Toro of UAE Team Emirates.
The city lies at a crossroads of major federal highways on the peninsula that lead to the northern centers of Los Angeles, San Diego, and Mexicali and south to Cabo San Lucas and La Paz. The junction occurs at the meeting of Federal Highway 1 and Federal Highway 3. The main roads of the city include Bahia de La Paz and Lázaro Cárdenas, northwest bound, and southeast bound roads.
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