The islands of São Tomé and Príncipe were uninhabited before the arrival of the Portuguese sometime around 1470. The first successful settlement of São Tomé was established in 1493 by Álvaro Caminha, who received the land as a grant from then Portuguese King John II. Príncipe was settled in 1500 under a similar arrangement. By mid 1500s the Portuguese settlers had turned the islands into Africa's foremost exporter of sugar. São Tomé and Príncipe were taken over and administered directly by the Portuguese crown in 1522 and 1573, respectively. By mid-17th century, the economy of São Tomé had changed and it primarily became a transit point for ships engaged in the slave trade between the West and continental Africa.

In the early 19th century, two new cash crops, coffee and cocoa, were introduced. By 1908, São Tomé became the world's largest producer of cocoa, which till date remains the country's most important crop. By the late 1950s, when other emerging nations across the African Continent were demanding independence, a small group of São Toméans formed the Movement for the Liberation of São Tomé and Príncipe (MLSTP), which eventually established its base in nearby Gabon. Consequent upon the overthrow of the Caetano regime in Portugal in April 1974, representatives of new Portuguese government met with the MLSTP in Algiers and worked out an agreement for the transfer of sovereignty. After a period of transitional government, São Tomé and Príncipe became independent on July 12, 1975, choosing the MLSTP Secretary General Manuel Pinto da Costa as its first President.

The country held its first free elections in 1991 but frequent internal disagreements between the various political parties has led to repeated changes in leadership and two failed coup attempts in 1995 and 2003. Yet another attempt to destabilize the government was made in February 2009 but the Government managed to arrest 40 people including the leaders who had planned to destabilize the Government.