In the year 1570 the decree of expulsion of the Moors was ordered. Although depopulation affected the good performance of the economy, in general the 16th and 17th centuries were relatively prosperous, both economically and demographically. Livestock is one of its most important activities, while agriculture will gain more prominence as the years go by, since demographic pressure caused the plowing of pastures and mountain lands to dedicate them to farming. With the new settlers, a new urban layout of the town was established, in which the grid around a central square predominates, although the Arab layout of its old neighborhoods persists. On the other hand, their domains are converted into domains, under the tutelage of the Marquis of Algarinejo. After the reconquest and until 1578, Algarinejo belonged to Pedro de Montalbán.

Subsequently, their lands were confiscated by the Inquisition and sold as lordship to Francisco de Lisón y Saorin, born in Montefrío. In 1614, Algarinejo was sold again, by Felipe III, to the son of Francisco de Lisón: Mateo de Lisón y Viedma. The latter buys for 3,200 ducats the civil, criminal and vassalage jurisdiction of the then called “cortijo de Algarinejo”.

The town, which was no more than a small nucleus of houses, now acquires its status as an independent municipality. It has half a league of land and a neighborhood of 117 inhabitants, including a bailiff, a councilor, and a sacristan. Among its buildings, the existence of a parish church erected around the year 1578 stands out, the date on which the first baptism books began, followed by the betrothal books in 1595.

In 1669 the municipality of Algarinejo changed ownership again, and was sold to the grandson of Mateo de Lisón y Viedma: Juan Femández de Córdova, first Marquis of Algarinejo. From this date until the year 1693, the town of Algarinejo (it was granted the title of town in 1687) already had 387 residents and two leagues and a quarter of land. The economic recovery experienced by Algarinejo in the 17th century resulted in the creation of artisan factories related to the grinding of cereals, such as bucket mills.

In 1680 there were several earthquakes that dismayed the municipality.