Caye Caulker was originally a fishing settlement. It became popular with 17th-century British buccaneers as a place to stop for water and to work on their boats. Like Ambergris Caye, it grew in population with the War of the Castes, and is known mainly as a Mestizo island. It was purchased in 1870 by Luciano Reyes, whose descendants still live on the island. Reyes parceled the land out to a handful of families, and to this day descendants of those first landowners still live in the general vicinities of those original parcels. These islanders were self sufficient and exported turtle meat until the turtle population was decimated.
During much of the 20th century, coconut processing, fishing, lobster trapping and boat building formed the backbone of the island’s economy. Caulker was one of the first islands to establish a fisherfolk cooperative in the 1960s, allowing members to receive fair prices for the lobster and other sea life pulled from their waters.
Caye Caulker remains a fishing village, and boat design and construction continue, but tourism is taking over the economy. Tourism began in the late 1960s and 1970s when small numbers of hippies found their way to the island. Today, international visitors come in steady numbers, however, although many islanders operate tourism-related businesses, there are no plans for large-scale development. Caulker residents enjoy the slow rhythm of life as much as visitors do.