The arid climate ensured that grazing would become prominent on the plains, with farming limited to river valleys until the introduction of well-drilling, which gave rise to new agricultural centers. The construction of dams in the late 1880s resulted in the impoundment of the Pecos River for irrigation purposes. It is during this time (1850-90), when the land was being developed and the hostilities between Americans, Mexicans, Navahos, and Apaches reached their apex, that the Puerto de Luna valley was settled.
The Agua Negra land grant was allotted to Antonio Sandoval on November 24, 1824, by the Republic of Mexico. On January 21, 1860, the land grant was confirmed by the Congress of the United States, with the acreage set at 17,631. In the spring of 1863, Mexican-American families moved to the banks of the Pecos River and established settlements on the Agua Negra land grant. The land was known to them and to their fathers, who hunted buffalo on the plains, and the settlers soon built homes and irrigation ditches and developed increasing acres of this new land. One of the later settlers was Don José Luna, from Los Lunas in Valencia County. His home became the stopping place for travelers, who called it puerto de luna, and the name later was extended to the settlement itself. In 1891, Guadalupe County was established out of a portion of San Miguel County, and Puerto de Luna became the county seat. That same year, the compulsory school act was passed, requiring youths to attend school. In 1903, the county's name was changed to Leonard Wood County, and Santa Rosa was made the county seat. In 1906, however, the name of the county was changed back to Guadalupe by the Legislative Assembly because the Anglo-sounding "Leonard Wood" was unpopular among the locals.
