The proper village developed during the 12th century, with the creation of mills, sawmills and blacksmiths for copper manufacturing along the Gambis brook. By that time, the Fiemme Valley was ruled by prince bishop of Trento, which allowed a broad autonomy to the local community (from here the name, Magnifica Comunità di Fiemme). During the 16th and 17th centuries Cavalese became the vacation resort of bishops and aristocrats from the region, who greatly contributed to the development of the village.