Gracias , or Gracias a Dios (" Thanks to God"), an inland city of Honduras, capital of a department of the same name, situated in a fertile plain, near the foot of a steep and craggy mountain, 77 m. W. by N. of Comayagua; lat. 14° 30' N., Ion. 88° 50' W. Though now having only 3,000 inhabitants, Gracias was once a flourishing city, with a large population, attracted thither by the rich mines of the surrounding country, and was the chief entrepot for merchandise in transitu from Puerto Caballos to the populous region of Guatemala. It was founded in 1530 by Gabriel de Rojas, and enlarged in 1536 by Gonzalo (or more probably Pedro) de Alvarado. Until 1544 it was the seat of government of Guatemala and Nicaragua; but since then it has gradually fallen from its original splendor, the only traces of which are now visible in the parish church and the convent of La Merced. Although mining is still followed to a considerable extent, and opals of the finest quality are found in the vicinity, the inhabitants depend chiefly on agriculture for subsistence. The climate is very salubrious.
Near the town a mountain torrent, one of the tributaries of the Rio Santiago or Venta, plunges by two successive leaps to a depth of 1,200 feet.