It’s 1525, and about 20,000 native warriors are about to make history out of the troop of conquistadores scouting the bay. The eyes of the Spanish invaders turn to their priest, who calls for divine intervention. One of the flags held aloft starts glowing with a brilliant image of the Holy Cross. Terrified at the sight, the local warriors withdraw and the Spaniards take over the bay.

In Spanish, banderas means flags. That’s how Puerto Vallarta’s immense, crescent-shaped Banderas Bay got its name, according to one legend recounted by the town’s official historian, the late Carlos Munguia.

A series of bronze sculptures face the Pacific along Puerto Vallarta’s waterfront street, the Malecón.

Another account, by Francisco Cortés de San Buenaventura, nephew of the famous conquistador Hernando Cortés, recalls that the Indians carried arches and spears bearing cotton flags of different colors and designs when entering into battle. This inspired him to name the region Valle de Banderas.

Over the centuries, the bay’s 25 miles (40 km) of golden beaches have seen everything from boatyards and shipping terminals to sprawling banana plantations. Offshore, pirates, including Sir Francis Drake and the young Thomas Cavendish prowled these waters looking for galleons loaded with locally mined silver.

In 1851, colonizers began to build a town about midway along the shoreline. The city, in today’s western Mexican state of Jalisco, was originally named Puerto Las Peñas (the rocks), but was it renamed Puerto Vallarta in 1918 in honor of Ignacio Luis Vallarta, a former state governor.

The town’s debut to the tourism map was sparked by the filming of a movie here in 1964. As things turned out, it was much more than a movie. Director John Huston’s The Night of the Iguana, adapted from the Tennessee Williams play, had a cast of superstars including Richard Burton, Ava Gardner and Deborah Kerr.

It was spiced by an off-screen romance between Burton and film beauty Elizabeth Taylor, who’d followed him to Mexico. When word of this got out — Liz was still married to Eddie Fisher at the time — the scandal made headlines around the world.