Anguilla was first settled by Amerindian tribes who migrated from South America. The earliest Amerindian artifacts found on Anguilla have been dated to around 1300 BC, and remains of settlements date from 600 AD. The date of European discovery is uncertain: some sources claim that Columbus sighted the island in 1493, while others state that the island was first discovered by the French in 1564 or 1565. The name Anguilla derives from the word for "eel" in any of various Romance languages (modern Spanish: anguila; French: anguille; Italian: anguilla), probably chosen because of the island's eel-like shape.

Anguilla was first colonized by English settlers from Saint Kitts, beginning in 1650. The French temporarily overtook the island in 1666 but under the Treaty of Breda it was returned to English control. Other early arrivals included Europeans from Antigua and Barbados. It is likely that some of these early Europeans brought enslaved Africans with them. Historians confirm that African slaves lived in the region in the early seventeenth century. For example, Africans from Senegal lived in St. Christopher (today St. Kitts) in 1626. By 1672 a slave depot existed on the island of Nevis, serving the Leeward Islands. While the time of African arrival in Anguilla is difficult to place precisely, archive evidence indicates a substantial African presence (at least 100) on the island by 1683.

The island was administered by England, and later the United Kingdom, until the early nineteenth century when - against the wishes of the inhabitants - it was incorporated into a single British dependency along with Saint Kitts and Nevis. After two rebellions in 1967 and 1969 and a brief period as a self-declared independent republic headed by Ronald Webster, British rule was fully restored in July, 1971. Anguilla became a separate British dependency (now termed a British overseas territory) in 1980.

Anguilla's thin arid soil is largely unsuitable for agriculture, and the island has few land-based natural resources. Its main industries are tourism, offshore incorporation and management, offshore banking, and fishing. Many insurance and financial business are headquartered in Anguilla.

The economy of Anguilla is expanding rapidly, especially the tourism sector which is driving major new developments in partnerships with multi-national companies. This boom, beginning gently during 2005-2006, is accelerating through 2007 and is expected to continue for years. In an effort to prevent overheating, there is currently a moratorium on "non-belongers" (foreigners) buying land in Anguilla