Probably the name Kefalonia comes from a hero from Attica named Kefalos who fought on the island in about 5th century BC. The human presence on the island is dated to the Paleolithic period. During the Mycenaean period Cephalonia was flourishing and the island had connections with neighboring Ithaca, Lefkada and even the far-off Cyclades. This communication was abruptly terminated in 1500 BC probably because of the great destruction caused by the eruption of the volcano on Santorini; it was restored two centuries later when the island began to flourish again. From the 11th century BC, until the end of the 7th century BC, there are few facts. In the next century the island became the Ionian Sea center for transit trade.

The 5th century BC was characterized mainly by the development of four important towns on the island: Krane, Pali, Pronoi and Sami. These towns were autonomous, with their own currency, united in the case of a common enemy such as the Persians, but divided during the Peloponnesian War. In 187 BC Cephalonia was occupied by the Romans and became subject to Byzantium nearly six centuries later (395 AD).

In 1082 the Norman baron Guiscard tried, without success, to seize the island. The endeavors of the Normans, were taken up by Venetian pirates until the island finally fell into the possession of the Orsinis in 1185. In 1483 it was destroyed by the Turks and in 1500 recaptured by the Venetians who held on to it until 1797, when it was occupied by the French under Napoleon. The French occupation was succeeded by a brief Russian and Turkish one, until the British prevailed in 1809. The British rule came to an end in 1864 and the island was united with Greece.

In the catastrophic earthquake in 1953, sparing only a few spots in the north, entire town and villages where razed, more than 600 people died thousands where injured. Everything was rebuild since 70% of all constructions were demolished. At that time many desperate Cephalonians left their island to seek a better life abroad.