Finalborgo developed inland from the Ligurian coast as the fortified capital of the Marquisate of Finale, a small but strategically placed state ruled for centuries by branches of the Del Carretto family. The settlement occupied a defensible plain near routes crossing the Apennines, while nearby Finale Marina connected it to Mediterranean trade. Although the territory had older Roman and early medieval communities, the organized walled town took shape in the High Middle Ages. Its name distinguished the borgo, or borough, from the coast and from the family's hilltop stronghold at Castel Gavone.

The Del Carretto dynasty emerged from the descendants of Boniface del Vasto and consolidated authority across western Liguria during the twelfth century. Tradition dates Castel Gavone to about 1181, and the castle became the marquises' principal symbol above the town. Finalborgo's walls, gates, narrow streets, and compact blocks expressed the practical needs of a capital exposed to rivalry among Genoa, imperial powers, and neighboring lords. Religious patronage reinforced dynastic legitimacy: the marquises founded the convent of Santa Caterina in 1359, and Dominican friars established a community there in 1381.

During the fifteenth century the marquisate's independence repeatedly collided with Genoese expansion. War in 1447 and 1448 brought siege, occupation, and damage to Finalborgo and Castel Gavone, but Del Carretto rule was later restored with outside support. Rebuilt fortifications and palaces preserved the town's role as an administrative center. The basilica of San Biagio, whose present Baroque form largely dates from the seventeenth century, replaced earlier churches and became the principal parish landmark. Noble houses, arcaded lanes, and carved slate portals reveal the prosperity of families tied to government, commerce, and regional landholding.

Finale's position made it valuable to larger states seeking an alternative to Genoese-controlled routes. Spanish influence grew in the sixteenth century, and the last marquis sold his rights to the Spanish crown in 1602. Governed through Habsburg Milan, the enclave served Spanish communications between Mediterranean ports and northern Italy. Genoa finally acquired the marquisate in 1713 and dismantled much of Castel Gavone in 1715, an emphatic end to the old capital's political autonomy. The town later passed through Napoleonic administration and, after 1815, into the Kingdom of Sardinia.

The nineteenth century changed Finalborgo's functions without erasing its medieval plan. Convents were suppressed or repurposed, roads and commerce increasingly favored the coastal settlements, and the old walls lost their military purpose. After Italian unification, civic institutions and workshops occupied historic buildings. In 1927 Finalborgo joined Finale Marina, Finalpia, and Varigotti in the municipality of Finale Ligure. The former Santa Caterina complex eventually became a cultural center and archaeological museum, connecting the walled town to the deeper human history of caves and prehistoric sites throughout the Finale region.

Modern preservation has treated Finalborgo as a living town rather than an isolated fortress. Restored gates still lead into streets used for homes, shops, festivals, and public services, while sections of wall and the ruins of Castel Gavone explain the settlement's defensive geography. Tourism has renewed buildings but also creates pressure for commercial uniformity and seasonal crowding. Finalborgo's value lies in the visible relationship among a feudal capital, its religious institutions, its mountain castle, and the coastal economy below. Its layered fabric records how a small Ligurian state survived between far more powerful neighbors.