Maldivian mariners knew the Chagos Islands well. In Maldivian lore they are known as Fōlhavahi or Hollhavai (the latter name in the closer Southern Maldives). According to Southern Maldivian oral tradition, traders and fishermen were occasionally lost at sea and got stranded in one of the islands of the Chagos. Eventually they were rescued and brought back home. However, these islands were judged to be too far away from the Maldives to be settled permanently by them. Thus for many centuries the Chagos were ignored by their northern neighbours.

The islands of Chagos Archipelago were charted by Vasco da Gama in the early sixteenth century, then claimed in the eighteenth century by France as a possession of Mauritius. They were first settled in the 18th century, by African slaves and Indian labourers brought by Franco-Mauritians to found coconut plantations. In 1810, Mauritius was captured by the United Kingdom, and France ceded the territory in the Treaty of Paris.

In 1965, the United Kingdom split the Chagos Archipelago from Mauritius, and the islands of Aldabra, Farquhar and Desroches (Des Roches) from the Seychelles, to form the British Indian Ocean Territory. The purpose was to allow the construction of military facilities for the mutual benefit of the United Kingdom and the United States. The islands were formally established as an overseas territory of the United Kingdom on 8 November 1965. On 23 June 1976, Aldabra, Farquhar and Desroches were returned to Seychelles as a result of its attaining independence. Subsequently, BIOT has consisted only of the six main island groups comprising the Chagos Archipelago.