Espaola is a city primarily in Rio Arriba County, New Mexico, in the United States. A portion of the central and eastern section of the city is in Santa Fe County. Espaola was founded in 1880 as a railroad village and incorporated as a city in 1925. The city is situated in an area Juan de Oate declared a capital for Spain in 1598. Espaola has been called the first capital city in America. At the 2010 census, the city had a total population of 10,495. Espaola is within the Albuquerque ? Santa Fe ? Las Vegas combined statistical area.