In Ancient times, the island played a minor role during the Persian Wars. In 480 BC, the fleet of the Persian king Xerxes was hit by a storm and was badly damaged on the rocks of Skiathos' coast. Following this the Greek fleet was beaten at Artemisium but finally managed to destroy the Persian fleet at the Battle of Salamis.

Skiathos remained in the Delian League until it lost its independence. The city was destroyed by Philip II of Macedon in 200 BC. During the middle ages the island was repeatedly ravaged by pirate attacks. In 1207 the Gizi brothers, Venetian merchants captured the island and buit the Bourtzi, a small venetian-styled fortress similar to the Bourtzi in Nafplio, on an islet just out of Skiathos town, to protect the capital from the pirates. But the Bourtzi was ineffective in protecting the population and in the middle 14th century the inhabitants moved the capital from the ancient site that lies were modern Skiathos town is, to Kastro (the greek word for castle), located on a high rock, overlooking a steep cliff to the sea at the northernmost part of the island. Kastro remained the only settlement of the island until the end of the greek war of independence, when the island's capital was relocated to the original site were it still remains.

In 1704 monks from Athos built the Evagelistria monastery which played a part on the greek war of independence as a hideout for greek rebels. The Greek War of Independence. Skiathos soon joined the ranks of those fighting the independence. At that time, it possessed a good number of fully equipped ships, with trained and experienced crews. When their revolutionary efforts failed, many people found refuge in Skiathos. This influx of population caused problems, as shelter and food became scarce. The island was plagued for years by violence and looting.

In 1823 the Turks tried to take the island again but were defeated. In 1829, after the signing of the Protocol of London, the inhabitants of Skiathos abandoned the Kastro and resettled along the harbour, when the ancient town had stood. Skiathos became officially independent upon the signing of a new Protocol in 1830. This protocol ceded to the Greek state - apart from other regions - the "Demon Islands", that is Skiathos, Skopelos and Alonissos. After independence, navigation on Skiathos once more flourished, and continued to grow until 1930.

During the 19th century Skiathos became an important shipbuilding center in the Aegean due to the abundance of pine forests on the island. The pine woods of the island were then almost obliterated. This was brought to a halt though, due to the emergence of steamboats. A small shipwright remains north of Skiathos town, that still builds traditional greek caiques.

In 1964 Skiathos was designated by the Greek National Tourism Organisation as a development zone for tourism. The results of this decision have largely transformed the island since, due to tourist oriented construction projects. These include the construction of the coastal road from Skiathos town to Koukounaries, the construction of Skiathos airport in 1984 and the construction of the first large hotel over Koukounaries beach. Along the coastal road many hotels have been constructed since the island became an important tourist destination.