Galveston Island has been occupied since the early 1500s. The island has been home to native Americans, Spaniards, and pirates as well as businessmen and entrepreneurs.

Galveston island was originally inhabited by members of the Karankawa and Akokisa tribes. The first permanent settlements on the island were constructed around 1816 by the pirate Louis-Michel Aury as a base to support the Mexican rebellion. In 1817 the famous pirate Jean Lafitte made Galveston his home. Lafitte remained in Galveston until 1821.

Mexico designated Galveston a port of entry in 1825, erecting a customs house in 1830. During the Texas revolution, Galveston served as the main port for the Texas Navy and served briefly as the the capitol for the republic of Texas.

Named for the Spanish colonial governor and general, Bernardo de Galvez, Galveston was officially incorporated as a city in 1839.

At the end of the 19th century, the city of Galveston was a booming metropolis with a population of 42,000 (more than Houston). Its position on the natural harbor of Galveston Bay along the Gulf of Mexico made it the center of trade in Texas, and the largest cotton port in the nation. At that time, the Strand area of Galveston was known as "the Wall Street of the South.

In 1900, the island was struck by a devastating hurricane, an event that still holds the record as the United States' deadliest natural disaster.
A marker along The Strand indicating a building that survived the 1900 hurricane. Many of the island's most impressive mansions in Galveston's historical East End near downtown survived.

Despite attempts to draw new investment to the city after the hurricane, Galveston never fully returned to its former importance or prosperity. Development was also hindered by the construction of the Houston Ship Channel, which brought the Port of Houston into direct competition with the natural harbor of Galveston Bay for sea traffic.

Today it is considered a major tourist destination and remains a port of entry and a destination for cruise ships, and a port of call and repairs for cargo ships. Galveston is currently ranked the no. 1 cruise port on the Gulf Coast and no. 5 in North America (2006).