The Juan Sebastián de Elcano was built in 1927 in Cadiz, Spain, and her hull was designed by the Spanish naval architect and engineer Juan Antonio Aldecoa y Arias in the Echevarrieta y Larrinaga shipyard in Cadiz. After the proclamation of the Second Spanish Republic in April 1931 it became part of the Spanish Republican Navy.
In 1933 under Commander Salvador Moreno Fernández's order a series of improvements were made to the ship and the bronze plate with the Latin language inscription Tu Primus Circundedisti Me was placed near the prow. At the time of the coup of July 1936 it was at Ferrol, a harbor that had been taken by the Nationalist faction. Her plans were used twenty-five years later to construct her Chilean sail training vessel sister ship Esmeralda in 1952-1954.