Throughout the 16th century the Villa gradually took shape around two population centres which came about differently. The first settlement chosen by the Adelantado, in the area of the Nuestra Señora de la Concepción Church did not have a planned urban layout. It just consisted of some houses made of rough stone and straw roofs making up a small hamlet. Towards 1500, a second, thought-out centre emerged, encouraging people to settle in the south starting from the Santo Espíritu (Convent of San Agustín).
The two villages, Villa Veccia or Villa de Arriba and Villa de Abajo, would eventually become one. A new city was founded following Renaissance concepts based on mathematical formulas and laying out the streets by using navigation tools. An urban grid system, in straight streets that make up blocks. Its layout is the first example of an unfortified town, an example of City of Peace, a territory-town limited by its natural boundaries: the Chamarta ravine and the Carnicerías or Gonzalianes ravine, as well as the lagoon and the surrounding mountains, which were its natural defence systems. Also, being inland protected the town from the constant attacks of pirates on the Canarian coasts. This model was later exported to American cities.
In Villa de abajo, which follows the Castilian model, stand the main square, around which the houses of the Adelantado, Justice and Government buildings were erected. The Queen Juana I of Castile, sent a Royal Letters Patent on 3 February 1510, granting the village the title of Villa and a coat of arms depicting Archangel San Miguel in military attire; under the saint, the castle and the rampant lion representing the kingdoms of Castile and León watching over a flaming mountain that represents El Teide, and surrounded by the sea. Around the coat of arms, the inscription: MichaelArcángel beni in aditorium populo dey Tenerife me fecit, segung.
The town grew quickly during this century to the point that in 1588 the military engineer Leonardo Torriani, sent to the islands by Felipe II to improve the defence systems and their descriptions, drew a map of the Villa de La Laguna depicting three convents, six country churches, the “Cabildo de Tenerife”, churches, two hospitals, squares and streets that still stand today. It is described as the biggest city built after the Conquest. The quick growth of the Villa led Carlos I to grant it the title of “Ciudad” on 20 January 1531; and it was also endowed with “de Noble y Leal Historia” [of Noble and Loyal History] on 8 September 1534.