Ebeye is popular location for those employed at the military base to the south, which coordinates many logistical and aid programs for the island.

When Christian missionaries first arrived in the Marshall Islands, they introduced Latin script writing and orthographized the Marshallese language.

Originally, Ebeye was written Ebeje by Europeans (Epjā in modern orthography, pronounced [ɛbʲ(ɛ)zʲæ]), which (according to elders of the atoll) means "making something out of nothing."

After World War II, the Americans took possession of the regional mandate from Japan and mispronounced the island's name as /ˈiːbaɪ/ EE-by from its spelling.

[8] Before the early 1950s, a large number of present-day residents of Ebeye lived on small islands throughout Kwajalein Atoll.

When Kwajalein island started to be used as a support base for the nuclear tests conducted at Bikini Atoll and Enewetak Atoll, Marshallese residents of Kwajalein were relocated by U.S. authorities to a small, planned community constructed on Ebeye, which was largely unpopulated and had served as a Japanese seaplane base before the Pacific War.

[9] With the advent of the Nike-Zeus anti-ballistic missile testing program of the 1960s, the U.S. military decided for safety and security reasons to evacuate slightly more than 100 residents of the central part of the atoll to create a zone where unarmed guided missiles could be targeted from the continental United States.

Subsequent population growth by migration from outlying rural atolls and islands throughout the Marshalls created a housing shortage and problems with resources throughout the following decades.

[11] In early 2024, the Marshal Islands were experiencing three months of drought, and in response international aid organization mobilized to bring some relief, such as extra water storage tanks.

[12] In 2024, a plan was announced to build a protective seawall at Ebeye, to reduce erosion and help prevent inundation from waves that over top the island.

[13][14] The Marshall Islands periodically have issues with overtopping waves, which can damage infrastructure, cause injuries, and render ground water undrinkable.

The detonation unexpectedly rained nuclear fallout and two inches (50 mm) of radioactive snow on nearby Rongelap Atoll, which had not been evacuated as had Bikini.

In 2009, the Ebeye Community Health Center was awarded a grant as part of the United States Stimulus for monitoring influenza (e.g.

[28] The Marshall Islands subsists primarily upon foreign aid and lease payments from the United States for the military use of Kwajalein Atoll.

The United States provides $1.5 billion in aid under the Compact of Free Association, spread out over the 20 years of the agreement, which expires in 2023.