Work on the area began in 1926 by the Companhia Ford Industrial do Brasil. It was immediately hindered by poor logistics and diseases that affected the workers who succumbed to yellow fever and malaria. No roads were available in the area, so it was only accessible by the Tapajós River. The site was developed as a planned community with different areas of the city being designated for the Brazilian workers and the American managers, who lived in the so-called American Village. Typical American houses were built, as were a hospital, school, library, and hotel. The town also had a swimming pool, a playground, and a golf course.

In 1928, the Ford Motor Company sent two merchant ships – Lake Ormoc and Lake Farge – loaded with equipment and furnishings ranging from doorknobs to the town's water tower. The town was then founded under the name Fordlândia.

The town had a strict set of rules imposed by the managers. Alcohol, tobacco and prostitution were forbidden within the town, including inside the workers' own homes. Inspectors (American managers) would go from house to house to check how organized the houses were and to enforce these rules. The inhabitants circumvented these prohibitions by paddling out to merchant riverboats moored beyond the town jurisdiction, often hiding contraband goods inside fruits like watermelons. A small settlement was established 8 kilometres (5 mi) upstream on the "Island of Innocence" with bars, nightclubs and brothels.

The land was hilly, rocky and infertile. None of Ford's managers had the requisite knowledge of tropical agriculture. In the wild, the rubber trees grow apart from each other as a protection mechanism against plagues and diseases, often growing close to bigger trees of other species for added support. In Fordlândia, however, the trees were planted close together in plantations, easy prey for tree blight, Saúva ants, lace bugs, red spiders, and leaf caterpillars.

From Yale University.