The first settlements in the district of present-day Nerja date back to prehistoric times - as the graffiti discovered in a nearby cave have proved . In ancient times, due to its pleasant setting, the town was a popular stopping-off point with sailors exploring this stretch of the Andalusian coastline. In the vicinity, the Romans founded a settlement known as Detunda, although the town enjoyed its period of greatest prosperity during the period of Arab domination (when it was known as Narixa or Narija, meaning "an abundant stream").

Interesting buildings in the town include the Church of El Salvador (17C-18c) and the 18C Hermitage of la Seņora de las Angustias, also known as the Chapel of Mercy. The marvellous look-out post situated on the top of the ancient fortress (pictured) is known as the Balcony of Europe. .