European explorers first sighted The Cayman Islands on May 10 1503, owing to a chance wind that blew Christopher Columbus' ship off course. On his fourth and final voyage to the New World, Columbus was en route to the island of Hispaniola (home to Haiti and the Dominican Republic) when his ship was thrust westward toward two very small and low islands, full of tortoises (turtles), in the sea surrounding them. He named the islands 'Las Tortugas' after the turtles.

The two islands sighted were Cayman Brac and Little Cayman. A 1523 map showing all three Islands gave them the name Lagartos, meaning alligators or large lizards, but by 1530 the name 'Caimanas' was being used. It is derived from the Carib Indian word for the marine crocodile, which is now known to have lived in the Islands. This name, or a variant, has been retained ever since. Thus the word eventually developed into Cayman and adding the word Islands, they became the ‘Cayman Islands’.

An early English visitor was Sir Francis Drake, who on his 1585-86 voyage to these waters reported seeing great serpents called 'Caimanas', like large lizards. It was the Islands' ample supply of turtle, however, that made them a popular calling place for ships sailing the Caribbean and in need of meat for their crews. This began a trend that eventually drastically depleted the local waters of the turtle, compelling Caymanian turtle fishermen to go further afield to Cuba and the Miskito Cays in search of their catch. 

Most of the early settlers in the Cayman Islands came from the British settlement in Jamaica. The first known settlers arrived in Little Cayman around 1658, and it is generally believed that they were deserters from Oliver Cromwell’s army in Jamaica. It is also believed that some may have been pirates who gave up their errant ways to live a more peaceful life on the islands. The first two settlers were Bowden and Walter. Over the course of the next couple of years some other settlers went to join them on Cayman Brac.

Isaac Bodden, the first recorded permanent inhabitant of the Cayman Islands, was born around 1700. He was the grandson of the original settler Bodden who was likely one of Oliver Cromwell's soldiers at the taking of Jamaica in 1655. A variety of people settled on the islands: pirates, refugees from the Spanish Inquisition, shipwrecked sailors and slaves. The majority of Caymanians are of African and British descent, with considerable interracial mixing.