The fortress was built as part of Portuguese India's defensive fortifications at the eastern tip of the island of Diu during the 16th century.

The fortress, which borders on the town of Diu, was built in 1535 subsequent to a defense alliance forged by Bahadur Shah, the Sultan of Gujarat and the Portuguese when Humayun, the Mughal Emperor attempted to annex this territory.

The Portuguese thus got the right opportunity, which they were seeking for long, to get a foothold on the Diu island to build a fort for the protection of their trade.

In 1531, Nuno da Cunha (1487 – 5 March 1539) who was the governor of Portuguese possessions in India from 1528 to 1538, was under orders from the King of Portugal to build a fort at Diu to strengthen its flourishing spice trade.

He launched a strong military attack to annex Diu from the Sultan, with 100 vessels and 8000 men, including 3000 Portuguese.

The Portuguese not only built a large fort at Diu by demolishing old fortifications that were existing on the island but continued to make it a formidable fortress by constantly strengthening it during the period from 1535 till 1546.

This put the Portuguese in a spot vis-a-vis the throne and they quickly repaired the damage by entering into a truce with the new Sultan, which was only a temporary reprieve.

[4] In 1538, the Turks, who were ill-disposed towards the Sultan of Gujarat and the Portuguese, mobilized a strong naval force comprising sixty-six ships and 20,000 soldiers.

When the fort's forces were about to collapse, the Turks, for unknown reasons, lifted the siege and turned back to the Red Sea.

[8] "Operation Vijay" was launched by India on 19 December 1961 to end Portuguese colonial rule in Goa, Daman and Diu.

The secured fort provided sea access for trade and traffic with Cambay, Broach (now known as Bharuch) and Surat in Gujarat.

[10][2] Construction of the fort was started in October and completed in March, with the Portuguese forced labour putting their full might.

A bastion built earlier by the Sultan in the deep water channel, next to the fort walls, was further strengthened by the Portuguese.