For such a small island, Bermuda has been punching above its weight ever since it was accidentally colonized in 1609, when the Sea Venture, a ship carrying 150 English colonists to Jamestown, Virginia, was shipwrecked on the island's reefs. Bermuda was uninhabited at the time; Spaniard Juan de Bermúdez passed by the island in 1505 and gave it his name, but most mariners steered clear of Bermuda in the 1500s, as it was dubbed the 'Isle of Devils.' The Sea Venture's passengers survived, built two more ships out of Bermuda's cedar trees – Deliverance and Patience – and arrived in Jamestown 10 months later, saving the starving colony with the food supplies from an island rich with game, thus altering the course of history for what was to become the United States of America.

In 1612, Bermuda was officially settled, but for much of the 17th century the island was prevented from becoming self-sufficient because the colonists were only allowed to trade with the Virginia Company ships and not allowed to engage in whaling or shipbuilding. Once those restrictions were removed in 1684, Bermuda quickly prospered through whaling, shipbuilding and trade, as well as a touch of privateering (prowling shipping lanes and capturing enemy ships) and 'wrecking' (luring ships onto the island's reefs and then stripping them of their valuables).

During Bermuda's early days as a colony, Native American, African and Caribbean slaves were brought to the island, and slavery remained a feature of the island economy until its abolition in 1834, though racial segregation remained in place right up to the 1960s. Emancipation led to Bermuda switching its focus from maritime activities to farming, with Portuguese immigrants arriving from the Azores in 1849 to help grow potatoes and the sweet onions that give Bermudians their nickname. During the American Civil War (1861–65), a combination of Confederate sympathies and the lure of profit led Bermudian vessels to break the Unionist naval blockade, delivering weaponry and other supplies to the Southern states.

In the late 19th century, Bermuda was 'discovered' by wintering Victorians and became a popular holiday destination for British socialites, writers and artists. Bermuda's strategic location made it an important naval base for the British; during WWII, British troops were joined by American and Canadian ones, and US forces lingered until 1995. Air travel and luxury cruises opened up the island to tourists following WWII and tourism continues to be a vital part of the island's economy.