The archeologist's pickaxe begun unearthing Santorini's exciting history in the mid-19th century, when the volcanic Thiran earth was excavated for use in the construction of the Suez Canal. It was then that the first traces of a prehistoric settlement came to light. The first buildings of the Prehistoric-era were discovered in 1866. French and German archeologists continued the research. However, it was the Greek archeologist Spyridon Marinatos, a professor at the University of Athens, who conducted the most important excavations.

These excavations, which began in 1967, were based on a bold theory that Marinatos first suggested in 1939. According to this theory, the eruption of the Santorini volcano took place in c. 1500 BC, burying a prehistoric city under tons of ash, while concurrently generating the collapse of the Minoan palaces in Crete.

Excavations uncovered an excellently preserved Bronze Age city, which confirmed this aspect of Marinates' theory.

Since then, scholars of Aegean prehistory have been preoccupied with establishing the date of the eruption. Marinatos' view prevailed for many years. However, excavations conducted over the past 15 years and the dating of finds from prehistoric Thira by scientific methods demonstrate that the eruption occurred much earlier, around 1050 BC. The collapse of the Minoan palaces two centuries later can no longer be connected to the eruption of the Thira volcano. The cause must now be sought elsewhere.

The oldest evidence of human settlement in the region is traced back to the Early Bronze Age, in the mid-3rd millennium BC. Artifacts found in Akrotiri show that Santorini had contact with Minoan Crete as well as mainland Greece during the Middle Bronze Age (1900- 1 600 BC).

The city of Akrotiri was destroyed by the great eruption. But it appears that this was preceded by smaller eruptions that prompted residents to depart beforehand, taking with them their most valuable possessions. One can also deduce this from the fact that no human or animal skeletons or valuable objects have been found on the island.

After the disaster, two to three centuries passed before the island was re-inhabited.

The Phoenicians, who settled in the island around 1300 BC, called it Calliste ("Most Beautiful") because of its exceptional natural beauty. in the late 12th c. BC, the Spartans, led by Thiras, arrived on the island and changed its name from Calliste to Thira.

In Hellenistic times Thira was the naval base of the Ptolemies. During the Byzantine era the island's population shrunk. Thira was given to Nicolas Sanudo, Duke of Naxos, in 1335, and to the Ottomans in 1566.

In the 18th century, with pirate incursions in the region all but ceasing, Santorini began to show Significant expansion in agriculture, shipping and trade.