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Cabanatuan was founded as Barrio of Gapan in 1750 and became a Municipality and capital of La Provincia de Nueva Ecija in 1780. In 1899, Emilio Aguinaldo moved the Capital of the First Philippine Republic from Malolos to Cabanatuan. Cabanatuan is the site of the historical "Plaza Lucero" and the Cabanatuan Cathedral, where General Antonio Luna was ambushed on his way to Palanan. Cabanatuan lost the title of capital in 1850 when the capital of Nueva Ecija was moved to San Isidro, another historic town. It was only in 1917, when the Administrative code was enacted, that Cabanatuan was restored as capital of the Province. However, in 1965, Congress created Palayan City, which has been the capital ever since.

During World War II, the occupying Japanese built Cabanatuan Prison Camp, where many American soldiers were imprisoned, some of whom had been forced to endure the infamous "Bataan Death March". In January 1945 elements of the US Army 6th Ranger Battalion marched 30 miles behind enemy lines to rescue the prisoners in what became known as the Raid at Cabanatuan.

Cabanatuan was also the epicenter of a massive earthquake at roughly 3 p.m. on July 16, 1990. The earthquake leveled some buildings, including the Christian College of the Philippines (Liwag Colleges) in the midst of class time. At 7.7 on the Richter scale, it killed 1653 people.