Just like the rest of the archipelago, the town of Bay has no record before the coming of Spaniards in the 18th century. Bay existed long before the coming of Spaniards. The Chinese must have come to the lakeshore towns to trade as early as 9th century. The earliest account of Bay appeared in the conquest of island of Luzon published in April 20, 1572. It was described a great lake of fresh water, 12 league wide and very deep. The villages around the lake had about 25,000 inhabitants when Captain Juan de Salcedo arrived in the area.
Bay is one of the oldest towns in Laguna province, and was the province's first capital. Its original territory covered the areas that are now known as Los Baños, Calauan, Alaminos and San Pablo (in addition to its current territory). The Spaniards pronounced the name of the town "Bah-ee" while the natives called it "Bah-eh." Either way, the similarity in spelling has led to the misconception that the town was named after Laguna de Bay. Instead, the Spaniards named the lake after this ancient Tagalog community