Archaeological excavations have proved that the island was inhabited since the Paleolithic Era. According to the myth, Corfu was the island of the Phaeacians, where Odysseus landed on his return trip to Ithaca.

In ancient times, Corfu was a very important commercial center inhabited by the Phoenicians. There was trading with all the towns of the Adriatic Sea, making Corfu a strong naval power and an important colonial town, known today as Paleopolis. The ruins of this ancient town are found right opposite the Mon Repos Palace in Corfu Town. Some ancient temples have also been excavated around the island, such as the temple of Artemis.

During the Peloponnesian War, Corfu asked for military help from Athens for an important battle against Corinth. The alliance between Corfu and Athens lasted for a century, until the Macedonians (under the rule of King Philip II), having won an important battle, conquered Corfu in 338 BC and took control of the island. From 300 BC, Corfu was successively attacked and conquered by Spartans, Illyrians, and Romans, who stayed on the island from 229 BC to 337 AD. During Roman times, the island was allowed to keep part of its autonomy and, in return, the Romans could use the port of the town.

The Roman contribution to the island included roads and public buildings including bathhouses. In 40 AD, Jason and Sossipatros, two disciples of Saint Paul, brought Christianity on the island and built the first Christian church which they dedicated to Saint Stephan.