The Jewel of Northern New Mexico. Española was founded in 1598 by Spain as the first capitol of New Mexico. It sits in the northern Rio Grande Valley between the Jemez Mountains and Truchas Peaks, and is a very convenient base for exploring northern New Mexico. Española has many lodging options and the best selection of restaurants. Don't miss the world-class local artists. Let us be your tour guide through the Beautiful Española Valley.