Ithaki was first inhabited in 4000-3000 BC. Information about its first inhabitants who were indigenous Greeks, comes from shards incised with the Linear A script found in Pilikata. Finds from the Pilikata settlement and Loizos Cave date back as far as 3000-2000 BC. By 1500 BC, the whole island was inhabited. The island's civilization reached a high point in 1000 BC, when the kingdom of Ithaca included the other Ionian islands and part of the coast of Arcanania. The decline that followed was mainly due to exhaustion of the soil. The northern part of the island, however remained inhabited and under cultivation. After 180 BC Ithaki was part of the Roman province of Illyria.
Later its port town, Polis or Jerusalem, was built; Anna Comnene refers to it in her "Alexias". The port was gradually abandoned and sank into the sea after the earthquake in 967 AD. In 1086 the first pirates appeared on the scene. In 1185, Ithaki was conquered by the Normans, who ceded it in 1200 to the Orsini family. The Orsinis remained rulers of the island until 1357, when the king of Naples handed it over to the Tocco family. The Turks sacked Ithaki, along with the rest of the Ionian islands, in 1479. Material damage was tremendous, many hostages were sold as slaves. Of the remaining population, many abandoned the island. When war broke out between the Turks and the Venetians in 1499, Ithaki, sharing the fate of neighbouring Kefalonia, was signed over in a treaty to the Venetians. The Venetian senate, concerned about the reduction in population due to fear of pirates and the Turks, granted lands to anyone who would come back, and exempted them from taxation. Many people were attracted by this offer, most of them from mainland Greece, which was suffering under the Turkish yoke.
In 1569 Ithaki was fortified for the first time. But the Venetian governors, taking advantage of the people's poverty and ignorance, often acted unjustly and sometimes committed acts of violence. Despite this the island's population increased to 10,000 and the the dawn of the 17th century found Ithaki's land under cultivation; the island had also put together a commercial fleet that was carrying on trade with Europe. This fleet took part in all the battles for freedom from the Turks up to 1821.
In 1798, the democratic French took over the Ionian islands but held them for only a year. Despite the heavy taxes they levied, their new revolutionary ideas were conveyed to the islanders. The Russians and Turks succeeded the French and a 14-member senate governed democratically until 1807. French rule returned for another two years, and in 1809 the English occupied the Ionian Islands and formed the "United States of the Ionian Islands".
During the Revolution of 1821, the Ithaki islanders joined the Friendly Society, taking part in its activities and offering a place of refuge to fugitive Greeks. It was in Galatsi in Romania that Ithacans first began the Revolution in 1821. Two waves of emigration, one in 1829 and the other in 1845, made the Ithacans famous as sailors and merchants abroad. Union with Greece in 1864, of which T. Paizis and the Radical Party were strong supporters, came at a time when Ithaki was a significant power, both in commerce and shipping.
Like the whole Ionian area, Ithaki has been stricken by repeated earthquakes. According to Partsch, the most violent occurred in 1648. There were other earthquakes in 1766, 1876, and between 1912 and 1918. Extensive devastation was caused by the 1953 earthquake.
On May 1, 1941 the Italian annexation began, and September 24, 1943 saw the beginning of the German occupation, which lasted only a year.