July 25, 1524 Pedro de Alvarado founded in the vicinity of Imoanchoe, capital of the cakchiqueles, the colony of Santiago of the Knights of Guatemala; but following the revolt of the people of brave warriors, the incipient European city had to be moved temporarily to Xepau or Olintepeque, near Quezaltenango.
Two important events occurred in the second half of February of 1525: Tonatiuh healed wound that received in the battle of Acajutla and could act with more clearance, and also received a reinforcement of 200 Spanish soldiers from Mexico.
Incontinent, the advance prepared a founding expedition into Cuzcatlin, the unvanquished city of the Pipil, and put in front of it to his brother Captain Gonzalo de Alvarado, Mayor 29 of the Ayuntamiento of Santiago of the Knights of Guatemala. This campaign included Diego Holguin, Francisco Díaz, Alonso de Oliveros and other many Spanish colonizers.
The company was crowned with success: around April 11, 1525, and close to the strong Indian Cuzcatlin, Gonzalo de Alvarado founded a colony, with the title of villa and the name San Salvador, and conforming to the style of the time, on behalf of his brother captain Pedro de Alvarado, elected as Mayor 19 of this city of European civilization Diego Holguin
The Church of this new European colony, entrusted to the priest Francisco Díaz, was placed under the advocation or Board of Trustees of the Holy Savior or divine Savior of the world, whose liturgical celebration takes place on August 6 every year, recalling the Biblical Miracle of the Transfiguration of the Lord on Mount Tabor.
The first historical news, of this colony, appears in the minutes of the 6 may 1525 of the City Hall of Guatemala; It consists that Pedro de Alvarado appeared and said that not can be celebrated cabildo, are absent from the City Mayor 21 Gonzalo de Alvarado and the aldermen Pedro Portocarrero, Diego Holguín and Pedro de Valdivieso, and that as Diego Holguín “left this city to live and stay in the villa de San Salvador which is Mayor” He instead appointed Francisco de Arévalo.
Another document that proves the existence of the villa de San Salvador in 1525 is a letter sent by Pedro de Alvarado lieutenants Governor of Mexico, given in Santiago de Guatemala on June 5 of that year, in which said: “I have conquered and won many provinces and they have built and founded the city of Santiago, where am I to the present of many people noble sons dalgo () others since the rraya (limit) of” Pedrarias (Davila) have founded the villa de San Salvador.
This primitive villa of San Salvador is depopulated, probably in the year of 1526, as a result of the formidable and general insurrection of indigenous peoples against Spanish domination.
More, in the light of the evidence and historical deductions Gonzalo de Alvarado stands as the rightful founder of the Salvadoran capital.
