[2] The earliest record of Sveti Stefan is as the capital of the Paštrovići community, which became a protectorate of the Republic of Venice in 1423, having been independent since the twelfth century.

They retained considerable autonomy and paid no tribute to Venice, in return for ceasing piracy against Venetian ships.

[3] According to a legend recounted by Stjepan Mitrov Ljubiša, the town fortification was funded after Paštrovići looted Turkish ships moored in front of Jaz during Barbarossa's siege of Kotor in 1539.

[6] The population of the island declined in the first half of the twentieth century, as residents left to join the armed forces or to move overseas.

The Yugoslav government converted it into a luxury hotel and moved the remaining inhabitants to the mainland, and the island village became an exclusive resort frequented by high-profile elites of the world.

[7] The resort was visited by many celebrities, including Orson Welles, Elizabeth Taylor, Sophia Loren, Marilyn Monroe,[1] Princess Margaret, Carlo Ponti, Ingemar Stenmark, and Kirk Douglas.

[13][14] On 13 July 2010 Montenegrin Statehood Day, Italian tenor Andrea Bocelli gave a concert at the resort to mark the Golden Jubilee of the hotel.

In communication to guests and media, Aman has indicated security concerns and conflicts with government entities as reasons for continued closure.