The Algarve International Film Festival originated in 1971 when the Cinema Youth Group (Grupo Juvenil de Cinema) from Portimão who had been trying to broaden its activity in favour of the reduced format organised the 1st Film Festival of the Algarve.  It truly became an international competitive festival under the responsibility of Carlos Manuel and his new team of collaborators in1981.  There were a total of 64 films competing, 29 of which are foreign. The Austrian Kurt Keil won the Top Award that year.

The festival showcases some of the best films on the international circuit, particularly short films and its programming has strong emphasis on social issues.