The Bahamas & Nassau were originally inhabited by a group of Arawak Indians known as Lucayan. Originally from the South American continent, some of the Arawak had been driven north into the Caribbean by the Carib Indians. Unlike their Carib neighbors, the Lucayan were generally peaceful, more involved in fishing than agriculture, and not cannibalistic.

When Columbus reached the New World in 1492, he is thought to have landed on San Salvador (also called Watling Island) or possibly Samana Cay, both in the Bahamas. The Spaniards made no attempt to settle but operated slave raids on the peaceful Arawak that depopulated the islands, and by the time the English arrived the Bahamas were uninhabited.

In 1629 Charles I of England granted the islands to one of his ministers, but no attempt at settlement was made. In 1648 William Sayle led a group of English Puritans from Bermuda to, it is thought, Eleuthera Island. This settlement met with extreme adversity and did not prosper, but other Bermudan migrants continued to arrive. New Providence was settled in 1656. By 1670 the Bahamas were given to the Duke of Albemarle and five others as a proprietary colony. The proprietors were mostly uninterested in the islands, and few of the settlements prospered. Piracy became a way of life for many.

When the earthquake destroyed Port Royal, Nassau on the island of New Providence became more important as a pirate hide out. With the end of the Queen Anne's War and the peace that followed, Great Britain started to crack down on piracy but for awhile the Bahamas remained relatively ignored. However, in 1715 Henry Jennings and his crew was forced to leave Port Royal and decided to make their home in Nassau on the island of New Providence. When they first arrived, Nassau was a small shanty town of tents, taverns and transients. The community consisted of a few taverns, the occasional whore and small but thriving pirate community. Jennings brought with him enough Spanish gold to make the sleepy town, a boom town and beacon for other pirates looking for safe haven. Piracy and smuggling began to thrive and Nassau became the new de-facto capital of piracy in the Caribbean with Jennings the unofficial Mayor.

The situation became so bad that the British Crown took notice and in 1717 serious efforts were made to end the piracy. The first royal governor, Woodes Rogers, succeeded in controlling the pirates but mostly at his own expense. He came with royal pardons for the pirates who would accept them. While many accepted the pardons others did not. Despite Rogers efforts, the island remained poorly defended from pirates and other enemies of England so even Rogers had to rely on privateering for some time as a means of defense.

Still, Rogers proved an exceptional governor, administrator, and pirate hunter. He offered pardons to pirates in an effort to get them to turn. While most were skeptical, they soon found him to be sincere and eventually 2,000 pirates accepted the pardons and made the Bahamas virtually pirate free. Rogers knew the habits of pirates and he was certain that many of the pardoned pirates would go back to their evil ways. But this concerned him little. Rogers recruited men from among those pardoned to hunt down those who returned to their old ways. The move was quite successful and eventually many of the brethren of the coast were "dancing the devil's jig" on the gallows.

By 1722 much of the organized piracy had died down.

The Bahamas were held for a few days by the U.S. Navy in 1776, and for almost a year by Spain in 1782-83, the islands reverted to England in 1783 and received a boost in population from loyalists and their slaves who fled the United States after the American Revolution. For a time, cotton plantations brought some prosperity to the islands, but when the soil gave out and slavery was abolished in 1834, the Bahamas' endemic poverty returned.

Two other periods of prosperity followed: the years 1861-65, when the Bahamas became a center for blockade runners during the American Civil War, and in 1920-33, when bootlegging became big business during the years of American Prohibition. But these were economic accidents; not until the tourist industry was developed after World War II did any form of permanent prosperity come to the islands.

The need to secure political representation for the islands' black majority led to the formation of the Progressive Liberal Party (PLP), which was able to form a government in 1967. The PLP worked to end racial segregation and secure independence for the islands, which was granted in 1973. Among the problems the government had to cope with after independence were drug trafficking in the Out Islands and the illegal entry of many Haitian refugees.