Cauayan is a city in Isabela situated in the center of this big and naturally rich province.  The town got its name from the word “Cauayan” meaning bamboo in the dialect of Gaddang, the early settlers of this place.  How it got its name is told vaguely by the natives in the tale about how the early Spaniards who reached the place found abundant growths of bamboo trees along creeks that circled the town site namely Bulod, Sipat, Bungkol and Marabulig creeks where few families lived.  It was also a common sight to see crocodiles basking under the cluster of bamboo along the creeks in the early morning sun.

Cauayan used to be a big municipality in terms of land area, however, with the creation of the neighboring municipalities of Luna (Antatet) Cabatuan, Reina Mercedes (Callering), Aurora and San Mateo, its land area was reduced to about 336.40 square kilometers.  Cauayan was an original town of the province of Cagayan. It was transferred to Nueva Vizcaya when it became a province in 1839.  Upon the creation of Isabela as a province by a Royal Decree issued on May 1, 1856, it was reverted as a town of the province.  Founded in 1740, Cauayan antedates the establishment of Isabela by 116 years.  The town site was first located in a place called Calanusian along the Cagayan River, but after a series of disastrous floods, the town site was transferred to its present location.