At about this time, the Spaniards organized the different barangays into political units.  The three barangays petitioned the government to transfer their barangays toward the area of Orong and established a town.  The three capitanes-Senior Polito Moreno, Senior Vicente Rojas and Senior Mariano Vingal - moved their people, established a new settlement in the area of what is now the present City of Kabankalan and elected Leocadio Tayum leader.  The capitanes  served a term of one year.

Only the Christians tribes joined the original three barangays.  The government continued the pacification campaign to bring the other tribes to live in the town around the church and the convent.

The pacification campaign of the Spanish forces during the period of 1838 to 1855, resulted to one of the most unfortunate and saddest tragedies in the annals of our history - the CAROL-AN TRAGEDY, the mass suicide of Manyabog's people.  They preferred to die rather than to be subjugated by the Spanish forces.

The years after the tragedy, Kabankalan was plagued with many calamities-hordes of locusts, famine, diseases and the mysterious burning of the municipal house in 1892.

Since its birth in 1825, despite the difficult years, Kabankalan became a progressive barrio of Ilog.

The revolution of 1898, which saw the establishment of the short-lived Negros Republic, forced the people of Kabankalan to join the rest of the province to rise up arms against the Spanish government.

The early years of the American Occupation were marred with anti-American feeling associated with the "babaylans", particularly with the nationalistic movement of Papa Isio, the recognized leader of the Pulahanes that showed terror not only in Kabankalan but also in the nearby towns.

Because of this anti-American sentiment, the American authorities subjected the houses and persons to raids and arrests.  This pacification campaign forced the people to reject Papa Isio and his Pulahanes.  On February 13, 1907, the Pulahanes burned several houses and haciendas.

Despite the Pulahanes, Kabankalan become prosperous and strong enough to earn recognition of the Insular Government.  Thus, the Philippine Commission passed Act of 1612 on March 14, 1907, which authorized the separation of Kabankalan from Ilog.

After the passage of the act, a special election was conducted.  Lorenzo Zayco was elected president of the town and Bonifacio Grande, vice president.The elected members of the municipal council were Alejo Coloso, Marcial Garcia, Manuel Garanchon, Leoncio Entierro and Sabas Gariando.  The other members were Lino Garde, Lope Manlapao, J Peralta Hervacio Torre and Gualberto Monteclaro.  The first duly constituted municipal officials made historic oath of office on January 2, 1908. Pre-war Kabankalan saw emerging development of the sugar industry.  Sugar mills (muscovado) were put up in Hacienda Bearin and Hacienda San Isidro.

The Second World War brought terrible destructions to Kabankalan; sugar mills were destroyed, school buildings demolished and houses razed to ground.  It brought havoc to the livelihood of the people.

The post liberation era concentrated on rehabilitation efforts, but the initiatives were purely self-help.

Agricultural development was given impetus with the founding of the Negros Occidental National Agricultural School (NONAS), in 1948, now NOAC , at Barangay Camingawan, that spurred agricultural activities in the eastern section of the town and with the establishment of the National Agricultural Resettlement and Rehabilitation Administration (NARRA), in the 1950's at Barangay Tabugon, that assisted the farmer-settlers in the western section.

The so-called "sugar-rush" in Negros Occidental prompted capitalists to put up the Southern Negros Development Corporation ( SONEDCO ) in the late 60's and the Dacongcogon Rice and Sugar Mill, Inc. ( DRSMI ) in the early 70's that provided milling factories to sugars farmers within the town and motivated them to expand their hectarage to sugar production-thereby placing Kabankalan at the crossroads of agro-industrial development and making it a hub of business and trade in Southern Negros.

With only a rural bank serving the credit and savings needs of the town in the 60's, Kabankalan now boasts of having a number of banks and other financial institutions maintaining offices and branches in the city, namely, Philippine National Bank (PNB) , Equitable Philippine Commercial Bank (Equitable PCIB) , Traders Royal Bank (TRB ), Development Bank of the Philippines (DBP) , Land Bank of the Philippines (LBP) , Rizal Commercial Banking Corporation (RCBC) , Allied Banking Corporation (ABC) , Bangko sang Kabankalan , Bank of Victorias and Bank of the Philippine Island (BPI) .

Following the bandwagon effect, commercial establishments from Bacolod City and nearby towns put up their own branches in the city, adding more boom to the business atmosphere.

The evangelization efforts begun by the mission church in Ilog bore unprecedented result with the erection of Kabankalan as a separate diocese from Bacolod on February 11, 1988.  Monsignor Vicente M. Navarra, D.D. was canonically appointed by His Holiness Pope John Paul II on recommendation of Papal Nuncio Bruno Torpigliani, as its first bishop.

At about this time, other religious denominations had already established churches around the city and, in some instances, to far-flung barrios. Since its creation as town in 1907, Kabankalan has dramatically leaped forward to become the most progressive and fast-developing municipality of Negros Occidental. On August 2, 1997, the people of Kabankalan ratified Republic Act 8297 which was signed into law by President Fidel V. Ramos on June 6, 1997 at Malacanang Palace, Manila converting Kabankalan into a component city of Negros Occidental.