The borough of Vallehermoso with an area of 109 km² is the second largest municipality on La Gomera after San Sebastián, and is made up of two municipal districts which extend from the northern face of the island down to the south. This unusual combination derives from the year 1812 when the insular boroughs were created and part of the Parish of Chipude was incorporated into Vallehermoso, which now corresponds to the southward facing flank of the municipality.
During the Gomeran feudal regime the borough was known for its wine production, which then suffered a crisis in the 19th century. As new export crops of tomatoes and bananas were introduced in the 20th century, the trade led the local landowners to build a davit on the northern coast, from which the produce was exported to Europe. Later this assembly became obsolete when the new port of San Sebastián was constructed in 1957.
Another significant economic sector was fishing, for which the La Rajita canning factory was built on the southern coast in the 1920s. The plant was the property of the Lloret y Linares Company and remained operative until the 1970s. The crisis of fishing and farming activities led to emigration which reduced the population of Vallehermoso to less than half, making it the Gomeran borough which has most suffered from the effects of emigration. At present the situation remains stagnant, as the local economy is based on a harmonious blend of rural tourism and agriculture.