During Spanish time the village was led by Basilio Debuyan that helps to improve the lives of its villagers, he helps building the house of the people and establish a church as the center of their faith and the plaza for their recreational place. The place was visited by a catholic priest from Iloilo once year. Debuyan became the first cabeza under the Capitan Mayor at Isio about 52 kilometers north of the town.
The prosperous and happy life of the people was later changed because the Canmanog River or the Naga river overflowed and destruct and took away their home and almost cost their lives. The plaza and the church was also sweep away. The people decided to transfer the place to a flat land across the river to the north. The selected area was a forestland. It was Debuyan himself who felled down the first Narra tree. The former site is now known as Sipalay Diotay. It stands today, a sentimental reminder of a once happy and prosperous village.
When the Americans arrived in the Philippines, Sipalay was already a full-pledged barrio of the Municipality of Cauayan . The barrio was the biggest and the most progressive district in the whole community. Debuyan became the first Barrio Delegado under the American regime. During the early 1920s, a new feeling surged through the hearts and minds of the people. It was their desire for independence, the urged to separate from the mother town. For this purpose, a society, La Liga del Sur was formed. Prominent leaders of society were: Don Severo Alejano, Mariano Mueda, Sr., Maximino Salveron, Inocencio Debuyan, Sr., Amando Zaragoza, Basilio Debuyan, and Alfonso Custioso.
The separation movement was the cry of the southern districts and Sipalay became its chief advocate. Reasons for the movement were: distance of Sipalay from the Poblacion of Cauayan, 54 kilometers; no roads connecting the two places and there seemed to be no efforts on the part of the town officials for the constructions of same; the danger and hardship of the early travel; and the much delayed mails often time, letters, dated a year ago arrived in Sipalay not by mail-carriers but by policemen whose presence were considered quite an event. The cry for the creation of a municipality south of Cauayan was not only imperative but also reasonable.
The City of Sipalay was very famous for their festivals; The Pasaway sa Sipalay is celebrated every last week of March marking the Charter Anniversary of the city. It features street dancing and merry making by performers from seventeen barangays of the city attired in mardigras and exotic costumes in the semblance of copper minerals.
Handurawan Festival is an annual fiesta celebration held every December 18-20 coupled with the yuletide season. The three-day activity is scheduled to provide Sipalaynons and visitors a time to enjoy.
The city was also as the considered as the “summer capital of the Negros” because of its beautiful beaches that can be compared to other beautiful beaches around the country. The city was also famous with different diving spots that rich with coral reefs and other underwater minereals.