The name is derived from the Arabic term “Al-farnat”, meaning “flour mill”. However, the earliest settlements can be traced back to prehistoric times, as the remains found in the streams of Palancar and Morales have shown.

The first written reference to Los Alfarnates (Alfarnate and Alfarnatejo) dates back to the 10th century, when it is described as “a busy flour-producing farmstead”, hence its name. However, the consolidation of this settlement as a “village” did not take place until Christian troops passed through in 1487, the area subsequently being repopulated by colonists from other parts of the region between 1489 and 1490. These two small villages continued to be linked until the 18th century, when they became separate municipalities.

The inhabitants of Alfarnate and Alfarnatejo share an unusual legend that is derived from their respective nicknames, "palancos” (lever-bearers) and “tejones” (badgers). The story can be traced back to the old horse track that used to link the two villages, where a huge stone was considered to mark the boundary between them. Legend has it that a heavy storm caused this stone to roll, coming to rest right in the middle of the track, rendering it impossible to use. In order to unblock it, so the story goes, the people of Alfarnate carried sticks with which to lever the stone, while their neighbours from Alfarnatejo used shovels and picks to dig, like badgers, underneath it so that it would roll away. The latter method finally prevailed and the stone rolled down to the river, on whose bed it is still believed to lie.

By the late 19th century, highwaymen were rife in Andalusia, and Alfarnate in particular was affected by this phenomenon, standing as it did close to the Puerto de los Alazores, a natural mountain pass and highroad from Málaga to Granada.

The economy is based almost exclusively on fish farming, the lake being fed by the streams and the river that flow through the village. Olive groves and a few almond trees are also cultivated, along with wheat and chick peas, the latter being so famed for their high quality that they were even mentioned by Cervantes.