In 1663 an English sea captain, William Hilton, for whom the island is named, sighted the high bluffs (headlands) of the island. English planters began settling the island in 1717 and grew indigo and rice as their main crops. After the American Revolution, cotton was introduced to Hilton Head Island, and its plantation owners grew rich. Meanwhile, the island's black population, brought to the island to work the plantations, contributed to the development of the region's creole language (Gullah) and culture that came to be called Gullah. In 1861 Union forces attacked and occupied the island, which was then used as a fueling station for ships blockading the Confederate coast during the American Civil War.

A bridge to the mainland was constructed in 1956, and electricity was brought to the island a year later. Hilton Head Island was subsequently developed as a resort and residential community, with golf courses, marinas, tennis courts, riding stables, and 12 miles of beach. In 1983 the island was incorporated as the town of Hilton Head Island. Pop. (2000) 33,862; (2006 est.) 33,838.