Koufonisia, together with Schoinousa, Iraklia, Donousa and Keros, form the cluster of the Small Cyclades, which always belonged to the sphere of influence of Naxos and Amorgos. The area has been inhabited since the depths of prehistory, with traces of human presence dating back to the Neolithic era.
The nearby island of Keros was one of the most important centers of the Cycladic Civilization (3rd millennium BC). On Keros and the neighboring islet of Daskalio, hundreds of Cycladic marble figurines were found — among them the famous sculptures of the Harp Player and the Flute Player, masterpieces that today adorn major museums. Ruins of an ancient and Roman-era settlement are also preserved on Kato Koufonisi.
In the Byzantine and medieval years the islands were almost entirely deserted, as piracy made them inhospitable. During the period of Venetian rule and the Ottoman Empire, they served mainly as pastureland and refuges for fishermen and pirates, under the dependence of Amorgos and Naxos.
Permanent settlement in Koufonisia revived in the 19th century, when fishing families settled on Pano Koufonisi. The island grew into one of the most vibrant fishing communities of the Aegean, with the largest fishing fleet in Greece relative to its population. In recent decades, its exotic beaches have turned it into a popular, youthful tourist destination, without it losing its authentic identity.