History
The village was elevated to civil parish in 1600, when it was de-annexed from the neighbouring parish of Praia do Norte. Friar Diogo das Chagas, in 1643, noted that the parish had about 160 inhabitants, and approximately 44 residences. At its largest, the population reached 1,400 inhabitants.
The town was practically destroyed in 1672 and 1673 during the volcanic eruption of Cabeço de Fogo (the name of the central volcano on the island of Faial). During this eruption, volcanic ash and pyroclastic projectiles rained down on the community, destroying homes and sterilizing agricultural lands in Capelo and Praia do Norte. Ironically, between 1673 and 1845, Praia do Norte was integrated into the civil parish of Capelo.
The Church of the Santissima Trinidade (Church of the Holy Trinity) in Capelo, was ordered constructed by the Captain-major, Jorge Goulart Pimental, to replace the parochial church, the Chapel of Nossa Senhora da Esperança (Our Lady of Hope), which was destroyed during the 1672 volcanic eruption. A chapel to Nossa Senhora da Esperança was later constructed near the old church (which has since disappeared from the landscape).
The chapel of Varadouro was founded in 1720, by Father Manuel Pereira Cardoso, to the invocation of Nossa Senhora do Carmo (Our Lady of Mount Carmel). Later, in his 1725 last testament, Father Cardoso requested that his inheritors celebrate a mass in perpetuity to the name Nossa Senhora do Carmo, the Holy Sacrament, and Santo António, on every first Sunday of October. The spa at Varadouro was constructed and inaugurated on 1 August 1954 by architect Read Teixeira.
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