The name Taraguilla appeared for its first time in 1582. It is mentioned in a document in which Constancia Rodríguez, who was the widow of Bartólome Carrillo, made a donation to Our Lady of the Defenceless Hospital in Gibraltar stating that it was "with the income from Taraguilla". This place may have been where one of the Roman roads included in the so-called "Antonine Route" was situated. The present village is strongly linked to the frequent floods that occurred in Estación de San Roque before that Guadarranque Reservoir was built.
The village was founded due to the Great Siege of Gibraltar in 1782. This was the place were the Spanish forces established an important military camp to atack the Rock, which gave place to its present name. The was always closely linked to Gibraltarian Companies and this is why a race course was built here in 1916 by the Andalusian Horse Racing Company. These installations were built coinciding with the construction of the Campamento - La Línea road.