It was founded on 27 June 1795 by Agust�n de la Rosa, an officer to the Spanish Empire.
Given its proximity to some Portuguese colonies in Brazil, the "Melo Village" (in Spanish, "Villa de Melo"), as it was once named, it was invaded by Portuguese forces in 1801, 1811, and 1816. With Uruguayan independence, Melo was officially declared capital of the department of Cerro Largo.
In 1845, the city square was renamed in honor of Manuel Oribe, a former President of Uruguay and a political leader of the White Party (Partido Blanco), which brought to light the relations of this corner of the country with that National Movement (the vast majority of its inhabitants have belonged to that same political community).
Melo had acquired the status of "Villa" (town) before the Independence of Uruguay. Its status was elevated to "Ciudad" (city) on 22 May 1895 by the Act of Ley N� 2.3279. It was capital of one of the nine original departments of the Republic.
The historian J.C. Chasteen has discussed the place of Melo in the history of Uruguay in his book "Heroes on Horseback: A Life and Times of the Last Gaucho Caudillos"
