The Portuguese first sailed to the Banda Islands in 1512, a year after Afonso de Albuquerque had conquered Malacca, which at the time was the hub of Asian trade.

[5] To keep the archipelago productive, the VOC repopulated the islands (including Banda Neira), mostly with slaves taken from the rest of modern-day Indonesia, India, and the coast of China, working under the command of Dutch planters (perkeniers).

[8] During the Dutch period, pro-independence activists Tjipto Mangoenkoesoemo, Sutan Sjahrir, and Mohammad Hatta all spent time in internal exile on Banda Neira.

The Dutch continued to rule the island until 1949, although the economic importance of nutmeg and mace declined greatly due to the loss of the Dutch monopoly after the British successfully planted nutmeg trees in other parts of the world (especially Penang and Grenada) following the Invasion of the Spice Islands in the Napoleonic Wars in 1810.

Banda Api erupted on May 10, 1988, from a N-SSW-trending fissure that cut across the island, with both explosive activity and lava effusion occurring.[9]).