The Town of Dingle was founded by the Fitzgerald and Rice families, who were to develop the town into the second largest port on the west coast (second only to Galway). Extensive trade with France and Spain was the main reason for Dingle's importance, and also the town was a embarkation point for pilgrims on their way to Santiago de Compostella to visit the shrine of St. James. It is said that the medieval church in Dingle, dedicated to St. James, was built by the Spanish.
Dingle town was granted a charter in 1607 by King James, after his predecessor Queen Elizabeth had sanctioned it in 1585. The town was enclosed by a strong wall, with two gates in what is now Dykegate Lane; the area enclosed was what is now Main Street and parts of John and Goat Streets.
The 16th and 17th centuries in Irish history are marked by rebellion and counter rebellion. In Munster, the Fitzgerald rebellion was unceremoniously crushed. One of the most tragic events took place at Dún an Óir, near Ballyferriter, where the besieged Irish, Spanish and Italians were surrounded by Lord Grey, who was accompanied by Walter Raleigh and the poet Edmund Spenser, author of the "Faerie Queen". On agreeing terms for surrender, the Italian leader was allowed to walk free; however, all the other 600 were slaughtered in the fort.