Archaeologists believe that Montserrat was first inhabited by Amerindians, named Arawak, by about 200 AD.  It is believed that they came from the area of Venezuela.  There may have been a group of peoples living on the island before the Arawak, but no evidence has been found as of present to support this theory.  Before Columbus sailed past the island in 1493, pirate-like Caribs conquered the Arawak, greatly depopulating Montserrat.  Columbus was informed of this, thus he decided not to explore the island.

In 1624, St. Kitts was the first island in the West Indies to be colonized by the English.  The island started getting highly populated and could not support the growing population.  Government officials decided to send some of the people to neighboring islands, including Montserrat in 1631, to start "daughter colonies" (Innanen, 1998).  By 1634 the island of Montserrat was settled with Europeans.

For many centuries inhabitants of Montserrat grew cash crops (tobacco, indigo, cotton) in the fertile valleys and sold them to Dutch traders for food and supplies.  The island inhabitants chose these crops because they were not labor intensive and could be grown on small plots of land, which allowed them to maximize their profits.  

In the mid 1600's Irish settlers began settling on the island with the Europeans who were already there.  Over the years Montserrat saw governmental changes and struggled to prove itself as economically sustainable.  In the 1970's the economy started moving from agriculture to more developed industries, and it became more dependent upon foreign investment (Innanen, 1998).