Until the break in U.S.-Cuban relations in the early 1960s, much of the land was owned by American citizens, and the mild, healthful climate and excellent fishing waters made the island an attractive resort. Bibijagua beach remains popular. Sighted by Columbus in 1494, the Isle of Youth was later used as a penal colony and was a rendezvous for buccaneers. During the colonial period it was a summer resort and a rest area for the Spanish military.

The island was ceded to the United States after the Spanish-American War (1898), and because its name was omitted from the Platt Amendment, which defined Cuba's boundaries, it was claimed by the United States as well as by Cuba. Finally, in 1907, the U.S. Supreme Court declared that the island did not belong to the United States; a treaty was later signed (1925) confirming the island as Cuban. Near Nueva Gerona is a large prison, often used for political prisoners. During the regime of Fidel Castro, himself jailed there in 1953, the island has been extensively beautified, but political prisoners are incarcerated there in large numbers. The Isle of Youth has suffered frequent damage from hurricanes.