Before the Inka or  Spanish arrived the region surrounding Cuenca was the territory of the Cañari ethnic group.  The Cañari are understood largely from oral traditions left to us by their conquerors, the Inka.  The Cañari seem to have been  a confederation of several groups, with the most powerful chief in the confederation resident at Hatun Cañar, a site now known as Ingapirca.  The Cañari people, working from their land base in southern Ecuador,  are an important political force in Native Andean politics in the modern nation.

The Inka empire grew rapidly throughout much of Andean South America in the fifteenth century, from their capital at Cusco.  It is difficult to date the Inka expansion into what is now southern Ecuador, but it would seem to have occurred under the ninth Inka ruler, Thupa Yupanki, in the 1480s or 1490s.
The Inka centre of Tomebamba is often associated with Thupa Yupanki's son, the Inka ruler Wayna Qhapaq, who is said to have been born there.  Whayna Qhapaq was very likely responsible for much of the Inka construction in this important northern Inka city.

Whayna Qhapaq's death, around the year 1527, precipitated a civil war within the Inka Empire, between supporters of two rival heirs, Atahualpa and Waskar.  The city of Tomebamba was destroyed in the war of succession, which Atahualpa won.

Sebastián de Benalcázar and his troops were the first Europeans to see the ruins of Tomebamba, on their way north to conquer Quito, in 1534.  The region remained populated, but the Spanish did not found a city at the location until 1557.  In that year the city of Cuenca was founded by the Spanish, and soon became a supply centre for Spanish mining communities at Azogues, Zaruma, Gualaceo.  The mines only dominated the economy for a short time, and by the 1580s or 1590s agriculture was the mainstay of Cuenca's economic success.

From the founding of the city Cuenca was part of the Audiencia of Quito.  The Audiencia in turn was part of the Viceroyalty of Peru up until the year 1739, when rule shifted to the Viceroyalty of New Granada, with its capital in Bogota.  This remained the case until the first years of the 1820s, when the revolutionary armies of Símon Bolívar advanced from the north and those of José de San Martín advanced from the south.  Cuenca became part of the new Republic of Gran Colombia, and remained so until Gran Colombia broke up into the three new republics, Ecuador, Venezuela, and New Granada, in 1830.

From 1557 until Ecuador gained its independence in the early 1800s the city of Cuenca was ruled by a small minority of wealthy landowners, many of whom had houses in the city, while maintaining large rural properties in the surrounding highland countryside. 
These people were, however, a distinct minority in colonial Cuenca.  The majority of the city's inhabitants were descendents of the colonial encounter between local Native Andean groups, enslaved Africans brought to Cuenca, and those of Spanish descent.