The earliest French settlement was in Cayenne in 1643, but plantation development was limited due to tropical diseases and an Amerindian population that strongly resisted colonization. After various conflicts with the Dutch and the British and an eight-year occupation by Brazil and Portugal, the French resumed control shortly before slavery was abolished in 1848 by Paris, and many of the colony's plantations collapsed.

At about the same time, France decided that penal settlements in Guiana would reduce the cost of French prisons and contribute to the colony's development. Napoleon III sent the first convicts in 1852; those who survived their sentences had to remain there as exiles for an equal period of time. With 90% of them dying of malaria or yellow fever, this policy did little to increase the population or develop the colony. French Guiana became notorious for the brutality and corruption of its penal system, which lasted until 1953.

Guiana became an overseas department of France in 1946, and in 1964 work began on the Centre Spatial Guyanais, which brought an influx of scientists, engineers, technicians and service people from Europe and elsewhere, turning the city of Kourou into a sizable, modern town responsible for 15% of all economic activity. The first Hmong refugees from Laos arrived in 1975 and settled primarily in the towns of Cacao and Javouhey. They now make up about 1.5% of the population and have become vital agricultural producers, growing about 80% of the department's produce.

Successive French governments have provided state employment and billions of euros in subsidies, resulting in a higher standard of living in some areas, though many urban areas around Cayenne remain extremely deprived. Rural villages also suffer from poverty, while in the hinterland many Amerindians and Maroons still lead a subsistence lifestyle.