The Portuguese explorer Jeronimo de Albuquerque and his crew arrived to the river Potenji in December of 1597, seeking a place to build city and a fortress to protect the Portuguese settlement and combat the French. At the same time, on January 6th 1598, the Fortress of Three Wise Kings was built and in December 25th of the same year, a small village was founded one mile away from the fortress, named Natal, which is Portuguese word for Christmas.

However, the city grew slowly since the sandy terrain in Natal was not good for growing sugar cane, which was the main crop for the Portuguese at the time. The Dutch took over the city in 1633 and renamed the fortress Keulen until 1654 when the Portuguese reclaimed it. In 1817, provinces from the Northeast attempted a revolution (Revolucao Pernambucana) to try to gain independence from Portugal though the revolution failed. Independence was achieved in 1822. Still, the town was slow to develop until World War II. During WWII, the American forces occupied the area. During this time, the first airport was built to supply Allied troops in Africa with the necessary goods. The Americans also brought in new products, like chewing gum and it is believed that this ‘democratic’ influence affected the culture of Natal. The state was the first to abolish slavery, ten years before the rest of the country

After the war, the main trade was the exportation of xelita, a tungstenium ore, cotton and carnauba wax. The main industrial sectors were textile and civil building. In recent history, tourism has been the main industry in Natal.