[5] The town and district were historically part of the Saurashtra region of Gujarat state and an important port on trade routes of the Arabian Sea of the Indian Ocean.

Due to its strategic importance, there was a Battle of Diu in 1509 between Portugal and a combined force of Mamluks, Venetians, the Ragusians, the Zamorin of Calicut, and the Sultan of Gujarat, Mahmud Begada.

The alliance quickly unravelled and attempts by the Sultans to oust the Portuguese from Diu between 1537 and 1546 failed.

Bahadur Shah sought to recover Diu but was defeated and killed by the Portuguese, followed by a period of war between them and the people of Gujarat.

In 1538, Coja Sofar, Lord of Cambay, together with the Ottoman Suleiman Pasha, came to lay siege to Diu and were defeated by Portuguese resistance led by Anthony Silveira.

Coja Sofar and Fernando de Castro, son of the Portuguese viceroy, perished in the struggle.

After this second siege, Diu was so fortified that it could withstand later attacks of the Arabs of Muscat and the Dutch in the late 17th century.

The Battle of Diu involved overwhelming land, sea and air strikes on the enclave for 48 hours until the Portuguese garrison there surrendered.

With no tall buildings except the fort, the town of Diu has a characteristically low skyline and is known for its Portuguese architecture.

The fort and the Basilica of Bom Jesus in Old Goa were chosen as the two wonders from India, among the seven from across the world, out of a list of 27 monuments built in 16 countries during the Portuguese rule.