As far as archaeologists can tell, the Cayman Islands were uninhabited before they were discovered by Christopher Columbus in 1503. He named them Las Tortugas after their large number of turtles. By 1530, they were called the Caymanes from the Carib word caimán for the crocodiles that also lived there. Through a variety of spellings, the name evolved into the English term Cayman.
The islands' early economy was focused on hunting turtles to provide turtle meat to ships preparing for the long journey back east across the Atlantic. After local turtles were hunted to extinction, Cayman turtlers began to hunt turtles on other nearby islands. For the first two hundred years, the islands were a lawless frontier society inhabited by pirates, privateers, refugees, shipwrecked sailors, and slaves.
England acquired the Cayman Islands and Jamaica with the signing of the Treaty of Madrid in 1670, and administered the islands as an informal dependency of Jamaica. During the 18th and 19th centuries, the British colonized the Cayman Islands from Jamaica. The colonial government based at Kingston appointed several justices of the peace to supervise Cayman affairs. One of these justices was informally called the governor.
White settlers brought black slaves with them from Jamaica, but slavery became entrenched only on Grand Cayman, which initially resisted emancipation after the British government abolished slavery in 1835. The early settlers were eventually able to develop more harmonious interracial relations, to the extent that about 40% of native Caymanians now identify as mixed-race.
The American Revolution resulted in the loss of the American colonies in 1783, forcing the British government to realize it had to grant more leeway to its remaining colonies to govern their own affairs. In 1831, the Cayman Islands were allowed to elect their own legislative assembly. In 1832, the title of governor was renamed to "custos", after the ancient British office of custos rotulorum. In 1863, the United Kingdom enacted a law formally making the Cayman Islands a dependency of Jamaica. In 1898, Jamaica appointed a commissioner to govern the Cayman Islands.
The end of World War II was followed by the decolonization movement. The United Kingdom recognized it could no longer afford to maintain control over the British Empire, and started preparing for the independence of most of its colonies.
Up to then, the Cayman Islands were reachable only by ship or seaplane, and remained quite isolated from the rest of the world. In 1952, construction began on the islands' first airfield, the Grand Cayman Island Airport, and it opened in April 1953. It was later renamed the Owen Roberts International Airport in honor of the pilot who had proposed its construction and then tragically died in a plane crash on takeoff at Kingston while piloting what was intended to be the first flight to land at the new airport.
In 1958, the United Kingdom enacted a law which formally separated both the Cayman Islands and the Turks and Caicos Islands from Jamaica as Crown colonies in their own right, and authorized the British government to promulgate regulations for both colonies' governance, in anticipation of the imminent organization of a Federation of the West Indies. The next year, the UK promulgated the Cayman Islands' first constitution, which included several innovations such as allowing women to vote for the first time. The islands' highest-ranking official was renamed the administrator. However, the constitution also continued the Cayman Islands' existing connections to Jamaica, in that they were still subject to the control of Jamaica's governor and supreme court.
At the same time, the Federation of the West Indies was formed in 1959, but it was unstable and fell apart in 1962. Jamaica declared independence immediately. In contrast, the Cayman Islands remained loyal to the British crown, but from now on would report directly to London, rather than indirectly through Kingston, and completely severed themselves from Jamaica.
During the 1960s, the Cayman government successfully pivoted the local economy away from its traditional focus on agriculture and towards what would become its main pillars today: tourism and offshore banking.
Before then, for several centuries, massive quantities of mosquitoes had tormented local residents and their livestock, and made the islands unattractive to visitors. In 1965, the government formed a Mosquito Research and Control Unit. The unit's vigorous efforts to reduce mosquitoes to tolerable levels (for example, through the liberal application of pesticides) enabled the development of the islands' modern tourism industry during the 1970s, 1980s, and 1990s.
In 1966, the Cayman government enacted a law providing for offshore banks and trusts, followed by a banking secrecy law in 1969 which made the islands into a popular tax haven. The islands have virtually no direct taxation. The government is funded almost entirely through indirect taxation in the form of steep tariffs on nearly all imported goods, including gifts. About 90% of the islands' food and consumer goods must be imported. There are no taxes on income, sales, property, inheritances, or gifts (as long as gifts are not physical goods crossing the border), though the government levies stamp duty on land transfers and mortgages, and a variety of fees against companies. As of 2026, the Cayman Islands is home to over 120,000 companies.
In 1972, a new constitution renamed the administrator to the governor. In 1983, the UK renamed its remaining Crown colonies (like Cayman and Turks) to British Dependent Territories. In 2002, they were renamed again to British Overseas Territories, the title still used today. Constitutional amendments in 2003 and 2009 formally recognized a premier and cabinet, similar to the arrangements seen elsewhere in the British Commonwealth.
In 2004, Hurricane Ivan damaged or destroyed 85% of the buildings on the islands. Since then, the islanders have completely rebuilt everything. New developments are subject to very strict building requirements.
In addition to banking, tourism is a mainstay of the economy, aimed at the luxury market and catering mainly to visitors from North America. Total tourist arrivals most recently peaked in 2018 at 2.38 million, including 438,000 stayover visitors and 1.92 million cruise passengers on day trips.
During the COVID-19 pandemic, other Caribbean destinations like the Turks and Caicos Islands reopened as early as summer 2020 to keep their economies afloat, despite the obvious risk to their own populations. The Cayman government chose to reopen more gradually to protect its people, but by the time all entry restrictions were dropped in August 2022, airlines and cruise lines had already shifted routes elsewhere. This is why total Cayman tourist arrivals reached only 1.5 million in 2025, including 450,000 stayover visitors and 1.06 million cruise passengers, while in contrast, the Turks and Caicos Islands recorded an all-time record of over 2 million tourist arrivals that same year (up from 1.46 million in 2018).
Caymanians enjoy one of the highest outputs per capita and one of the highest standards of living in the world. The Cayman Islands are one of the richest island territories not only in the Caribbean but in the world. Cayman employers have imported thousands of foreign nationals on work permits to staff the islands' banks, professional services firms, hotels, restaurants, retail shops, and many other kinds of businesses.
The islands' population exploded from about 40,000 in 2000 to over 90,000 in 2026, and it is projected to hit 100,000 by 2027. Expatriates (at 55%) now outnumber native Caymanians (at 45%). This caused the government to enact immigration reform laws in 2022, 2025, and 2026 to make it more difficult for temporary workers to obtain permanent residency. Over 140 nationalities and ethnicities reside in the Cayman Islands, forming a very diverse and prosperous multi-ethnic society.
