In the late eighteenth century, a Goan expatriate named António João de Sequeira (nicknamed Mossmikar), who had made his wealth while working in Mozambique, established Fontainhas.[1] The name came from a spring at the foot of the hill which began to sprout around 1770. It is patterned along the lines of Lisbon's Bairro Alto.

In 1844, a government administrator, who had restored a some order in Goa, directed that even the people of the lower strata of society should appear properly dressed in public. He built an elegant street with a parapet called the Rua Nova d’Ouremsea on the seaward side of the Fontainhas Bairro (Quarter). In the same area, he also created the Phenis fountain, with a façade and porch.[2]

The Fontainhas had a high population density. The rich lived on Panjim hill in large bungalows, while the less affluent lived at the foot and the east of the hill, hemmed in between the hill and the small tidal creek, which remains dry and emits a foul smell during the low flow season.[3]

William Dalrymple calls Fontainhas a "small chunk of Portugal washed up on the shores of the Indian Ocean".[4] It is the only area in Goa where Portuguese is still the main spoken language.[5]