Yap was formed from an uplift of the Philippine Sea Plate, and is referred to as a "high" island as opposed to atolls.

Yap was initially settled by ancient migrants from the Malay Peninsula, the Indonesian Archipelago, New Guinea, and the Solomon Islands.

[5] Yap is known for its stone money, known as Rai, or Fei: large doughnut-shaped, carved disks of (usually) calcite, up to 4 m (13 ft) in diameter (most are much smaller).

In 1874, Irish American sea captain David O'Keefe hit upon the idea of employing the Yapese to import more "money" in the form of shiploads of large stones, also from Palau.

Although today the United States dollar is the currency used for everyday transactions in Yap, the stone disks are still used for more traditional or ceremonial exchange.

The stone disks may change ownership during marriages, transfers of land title, or as compensation for damages suffered by an aggrieved party.

Finally, "Reng" is the name of money made of turmeric, which is ground and mixed with water and the paste shaped into a ball, typically used for tribal ceremonies.

Further, dietary taboos might be imposed on lower ranking villages, e.g., they might be prohibited from harvesting and eating the more desirable fish and animals of the sea.

In the early twentieth century, however, the German colonial administration pacified Yap and enforced a prohibition against violent conflict.

[citation needed] The first recorded sighting of Yap by Europeans came during the Spanish expedition of Álvaro de Saavedra in 1528.

Its sighting was also recorded by the Spanish expedition of Ruy López de Villalobos on 26 January 1543, who charted them as "The Reefs" (Los Arrecifes).

[13][14][15] At Yap, the Villalobos expedition received the same surprising greeting as previously in Fais Island from the local people approaching the ships in canoes, crossing themselves and calling out "Buenos días Matelotes!"

[16] The original account of this story is included in the report that the Augustinian Fray Jerónimo de Santisteban wrote for the Viceroy of New Spain while in Cochin during his voyage home.

[18]: 204–212  After their defeat by the United States in 1898, and subsequent loss of the Philippines, Spain sold Yap and its other minor Pacific possessions to Germany.

Yap was a major German naval communications center before the First World War and an important international hub for cable telegraphy, with spokes branching out to Guam, Shanghai, Rabaul, Nauru and Manado (on the north tip of Celebes).

[19] In World War II, Japanese-held Yap was one of the islands bypassed in the U.S. island-hopping strategy, although it was regularly bombed by U.S. ships and aircraft, and Yap-based Japanese bombers did some damage in return.

In that year, Yap, Truk, Pohnpei, and Kosrae formed the independent nation of the Federated States of Micronesia.

Other U.S.-based non-profit organizations, including Habele, have an ongoing presence on both Yap proper and its outer islands, aimed at reducing educational disparities and inequalities in access to effective classroom instruction.