Like most of the town in the past, the history of La Paz is recalled somewhat vaguely because it was dominated largely with legend and folklores, tainted with concomitant tragedy and mystery. Early chroniclers state that was once really an old pueblo called “CAMA JUAN” situated right along the bank of the Chico River bordering the Province of Tarlac and Nueva Ecija.

At one time in the distant past, a great flood from the overflowing bank of the Chico River due to torrential rains swept the whole pueblo at an unholy hour the when the entire populace was sleep. And by the time the town people came to their senses, there was no piece of ground left that was not underwater. The great flood left in its wake a picture of total devastation, leaving behind a great loss of human lives.

Out of bitter and painful experience, the inhabitants of Cama Juan had to evacuate the place in search of a better site for their future settlement. The old site (Cama Juan) is up to this time being referred to as “Bayang Iniwan” or abandoned town.

The first choice, alter the inhabitants of Cama Juan left for good, was a typical Filipino community existing amidst a verdant field of evergreen grass and shrubbery, thereafter christened “Matayumtayum”. Through constant labor and industry, the new settlement prospered in time and there reigned once more among the inhabitant’s peace and tranquility. Under the paternal guidance of the older folks, the settlers maintained their seat of government in said place.

Nearing the turn of the nineteenth century, through the initiatives this time of a local poet and writer who was destined to become some years later one of the ranking leaders of the Philippine Revolution, General Francisco S. Makabulos, and one Captain Mariano Ignacio, a more centrally located site has been selected for the future town which eventually became known as La Paz.

In all this period, La Paz existed in name only for actually and politically, it was nothing but a barrio forming a part of Tarlac town the year 1982 when it was separated from the town or Tarlac. It was only upon its creation as a town in that year that it was re-Christened La Paz, in honor of the Patron Saint, Nuestra Senora dela Paz y Buen Viaje, with Don Martin Aquino as the first Governadorcillo.

Later on, due to the heroic exploits of its revolutionary forces, La Paz was made the first seat of the local Government of the Province of Tarlac with General Francisco S. Makabulos as its first Governor.