In 1630, Providence Island was settled by English Puritans, under the aegis of the Providence Island Company. These Puritans decided to settle this promising tropical island rather than cold, rocky New England, but the Providence Island colony did not succeed in the same way as the Massachusetts Bay Colony. They established slave-worked plantations and engaged in privateering, which led to the capture of the colony by the Spanish in 1641. In the 1640’s, the Puritan-controlled Commonwealth government of England tried to regain the island, but without success. In 1670, English buccaneers led by Henry Morgan took over the islands. The buccaneers controlled the islands until 1689.

In 1803, Spain assigned the islands and the province of Veraguas (western Panama and the east coast of Nicaragua) to the Viceroyalty of New Granada. The territory was administered from the province of Cartagena.

On the 4th of July 1818, French Corsair Louis-Michel Aury, flying the Argentine flag, captured Old Providence and St. Catherine islands with the help of four hundred men and fourteen ships. He found the island populated by white English-speaking Protestants and their slaves. Aury and his team used the islands as his new base from which to pursue Central American independence. His efforts to also support Bolivar in his fight for Venezuelan and Colombian independence were repeatedly turned down.

After the Spanish colonies became independent, the inhabitants of San Andrés, Providence and St. Catherine voluntarily adhered to the Republic of Gran Colombia in 1822, which placed them under the administration of the Magdalena Department. The United Provinces of Central America (UPCA) also claimed the islands. Gran Colombia in turn protested the UPCA's occupation of the eastern coast of Nicaragua. The UPCA broke up in 1838–1840, but Nicaragua carried on the dispute, as did Gran Colombia's successors, New Granada and Colombia. Colombia established a local administration (intendencia) in the islands in 1912.

In 1928, Colombia and Nicaragua signed the Esguerra-Bárcenas Treaty, which gave control of the islands to Colombia. However, when the Sandinista government assumed power in the 1980’s, Nicaragua repudiated the treaty. Nicaragua claims that the treaty was signed under United States pressure and military occupation, thus does not constitute a sovereign decision. Colombia argues that the treaty's final ratification in 1930 (when U.S. forces were already on their way out) confirms its validity. Colombia and Honduras signed a maritime boundary treaty in 1999 which implicitly accepts Colombian sovereignty over the islands.

In 2001 Nicaragua filed claims with the International Court of Justice (ICJ) over the disputed maritime boundary, claiming 50,000 square kilometers in the Caribbean, including the San Andrés and Providencia archipelagoes. Colombia responded that the ICJ has no jurisdiction over the matter, and increased its naval and police presence in the islands. Colombia also defended its claim in the ICJ. On the 13th of December 2007 the ICJ ruled that the islands were Colombian territory, but left the maritime border dispute unresolved. Colombia and Nicaragua will go through another trial to resolve these claims. On the 19th of November 2012, the International Court of Justice decided that Colombia had sovereignty over the islands. However, the Court granted Nicaragua control of the surrounding sea and seabed, which include lucrative fishing grounds and what are thought to be substantial oil deposits.

The island of Providencia was hit by Hurricane Beta on the 29th of October 2005, inflicting minor to moderate damage.