While the first European visitors to the Bahama Islands were Bermudan salt rakers gathering sea salt in Grand Turk and Inagua after 1670, first lasting occupation was on Eluthera and then New Providence shortly thereafter. The attraction of New Providence was one of the best sheltered natural small vessel harbors in the West Indies.

Because of the harbor, and near adjacence to the Florida Strait, New Providence became a nest of pirates preying on mainly Spanish shipping returning to Spain with gold, silver, and other wealth. The apex of piratical activity there was from @1715 to 1725, after which the British government established a formal colony and military headquarters centered on the small city of Nassau fronting the New Providence harbor.

After the American Revolution, several thousand Tories and their slaves emigrated to New Providence and nearby islands, hoping to re-establish plantation agriculture. The shallow soils and sparse rainfall doomed this activity to failure, and by the early 19th century the Bahamas had become a nearly vacant archipelago. Salt raking continued here and there, wreck gleaning was profitable in Grand Bahama, but New Providence was the only island with any prosperity because of the large British military establishment. The fortresses began to crumble and be abandoned by 1850. New Providence had two periods of high economic success during the American Civil War and during Prohibition, when it was a smuggling center.

Since 1960, New Providence has become an American vacation destination with many tourist facilities, including deepened harbor for short visit cruise ship visitors and hotels featuring gambling activity. Most of the 300,000 Bahamians live on New Providence, and the Out Islands are largely uninhabited.