The islands' earliest inhabitants were Tainos (also called Lucayans), descendants of South American Arawaks who arrived by canoe from Hispaniola and Cuba nearly 200 years before Columbus. There are theories that it was Grand Turk - not San Salvador in the Bahamas - where Columbus first set foot in the New World. However, most history books credit Ponce de Leon as being the first European to sight Grand Turk (he did so in 1512).

Spanish slavers frequently raided the islands, enslaving the Caribs of the islands. Only a year after first being discovered, the entire archipelago was completely depopulated.

During the 16th, 17th and 18th centuries, the islands passed from Spanish, French and British control, but none of the three powers ever established any settlements.

From about 1690 to 1720, pirates hid in the cays of the Turks and Caicos Islands, attacking Spanish treasure galleons to Spain from Cuba, Hispaniola and the Spanish possessions in Central America and Peru.

The islands were not properly colonized until salt collectors from Bermuda built the first permanent settlement on Grand Turk Island (so named due to the presence of cacti with, what appeared to the salt collectors as, red fez-like structures on their tops) in 1681, drawn by the shallow waters around the islands that made salt mining a much easier process than in Bermuda and establishing the British dominance of the archipelago that has lasted into the present day. Huge numbers of trees were felled to discourage rainfall that would dilute the salt mining operation. Most of the salt mined in the Turks and Caicos Islands was sent to Newfoundland to be used to preserve cod in.

The agricultural industry sprung up in the islands in the late 1780s after 40 Loyalists arrived after the end of the American Revolution, primarily from Georgia and South Carolina. Granted large tracts of land by the British government to make up for what they lost in the American colonies, the Loyalists imported well over a thousand slaves and planted vast fields of cotton.

Though in the short term high successful, the cotton industry quickly went into decline, with hurricanes and pests destroying many crops. Though a few of the former cotton magnates changed to salt mining, just about every one of the original Loyalists had left the islands by 1820, leaving their slaves to live a subsistence lifestyle through fishing and hunter-gathering.

In 1799 the islands were given representation in the Bahamas Assembly, and they remained part of that colony until 1848, when the inhabitants successfully petitioned to be made a separate colony under the supervision of the governor of Jamaica. This arrangement proved to be a financial burden, and in 1873 the Turks and Caicos Islands were annexed to Jamaica.