The city of Ambato was founded in its present location on 6 December 1698 as the Seat of Ambato, on the request of Ambateños to the Royal Audience of Quito. For the next century, Ambato grew slowly into an important mountain center. The city was to play a pivotal role in the Ecuadorian War of Independence. On October 9, 1820, the citizens of Guayaquil, along with help from a number of Venezuelans and Colombians, declared independence from the Spanish monarchy. The group raised an army (known as the Junta de Guayaquil), and began to move against Spanish forces in Quito. On their way to Quito, Ambato was one of the first cities liberated. The city formally declared its separation from Spain on 12 November 1820.

After liberating Ambato, the Junta de Guayaquil then turned their attention to Quito. Under the command of Colonel Luis Urdaneta, the army had liberated most of the central highland region, but Quito and the northern highland region were still under the authority of the Royal Audience. Field-Marshal Melchor Aymerich, acting President and commander of the Royalist army took swift action and ordered forces to march on the Urdaneta's army stationed in Ambato. Urdaneta's army met the Royalists, led by Colonel Francisco Gonzaelz at the First Battle of Huachi just outside of Ambato on 22 November 1820 and were soundly defeated. Urdeneta retreated and Gonzalez entered Ambato.

A year later, the reformed patriots, under Antonio José de Sucre, left their position in Babahoyo to retake the highlands. In September 1821, the forces left the city, marching to reconquer Guaranda. On 12 September 1821, Sucre met the same fate as Urdeneta in the Second Battle of Huachi. Aymerich's forces defeated Sucre in the same plains that now form the neighborhood of Huachi, just southeast of downtown Ambato. Sucre returned to Guayaquil once more.

In 1822, the tide began to turn for Ambato and the rest of the towns in the central mountains. After two attempts to take the highlands, Sucre and the revolutionaries had built an excellent network of spies and a dedicated spirit of liberation. They had also had some luck; in 1821, the Spanish monarch, Fernando VII had sent his own commander, General Mourgeon to lead the royalist defense in Quito. Mourgeon arrived in November only to fall terminally ill in the spring of 1822. At the same time, Sucre was marching his army south to Macará to meet up with Peruvian forces sent by General José de San Martín. From Loja they moved north retaking Riobamba in April. Ambato was retaken soon after and the royalists were soon defeated at the Battle of Pichincha.

During the early years of the Republic of Ecuador the city served as an important cultural and economic center. Several times, Ambato served as the setting for rewriting of constitutions and continued to produce excellent artists and thinkers like Montalvo and Mera.

On 5 August 1949, the city was tragically struck by a devastating earthquake. It is estimated that more than six thousand people died, and thousands more were left homeless and destitute by the disaster. Much of the city's colonial center was completely ruined, including the cathedral that many considered on par with Cuenca's Iglesia de El Sagrario in terms of beauty. The city was rebuilt with significant help from international aid organizations and the Ecuadorian government. The new modernist cathedral was inaugurated on 12 December 1954.