The name of the village is from Campus Franci, literally the field of foreigners. It was originally a small market village, as well as providing pilgrims on the Arles route of the Way of St. James their first respite after the difficult crossing of the Pyrenees over the pass of Somport.

It was founded between 1080-90 by Sancho Ramírez, King of Aragon. Canfranc was also a command post, protecting the borders and controlling taxes, which were donated to the Cathedral of Jaca.

On 29 October 1288, the treaty of Canfranc mediated by Edward I of England was signed here, providing for the release of Charles II of Naples from his imprisonment by Peter III of Aragon.

The village, which lies in the valley of the Aragon River is situated at an altitude of 1040 m. The remains to be seen include a Romanesque pilgrim's bridge and two churches of interest: Nuestra Señora de la Asuncion (12th to 16th centuries) with four Baroque retablos, and la Trinidad (16th century). The town was obliterated by fire in 1617 and again in 1944, after which the villagers for the most part moved to nearby Canfranc Estacion. The current population is 77.

This small village (altitude 1190 m.) was largely created due to the inauguration of a railroad crossing the Pyrenees on 18 July 1928. Canfranc Estacion is most well known due to its huge abandoned railway station. The French side of the railway station is a forsaken place since an accident destroyed the bridge at nearby L'Estanguet.

There are rumours of "German gold" arriving here during World War II. Also, British espionage smuggled information and people from Vichy France to the consulate in San Sebastian through Canfranc since the nearer Irun bordered with occupied France.

The railway station is the highlight of the village and was used during the filming of Doctor Zhivago. There has been talk for some time of reopening international rail traffic between France and Spain, but until that time the area is profiting from its nearness to the ski resorts of Candanchu and Astun. The current population is 454.

The abandoned railway's Tunnel of Somport (7874 m) is now used as an emergency lane for the motorway's Tunnel of Somport (8602 m) and is also used for the Laboratorio subterráneo de Canfranc (Canfranc underground laboratory).