Cephalonia is believed to be one of the first inhabited Greek regions having been populated since 10.000 BC. It was named after the legendary King Kefalos, from Attica. For his assistance in a land dispute with the Peloponnese Myceneans, Tafioi, the first inhabitants gave him part of the island as a gift. When he was declared King, Cephalonia was divided in four towns which were said to be named after his four sons: Pali (today's Lixouri), Krani (Argostoli's outskirts), Sami and Proni. During the same period, Cephalonia had strong connections with Lefkada, as well as with the remote Cyclades that unfortunately were interrupted in 1500 BC, probably by the volcano explosion in Santorini.

During the expansion of the Roman Empire and particularly in 200 BC, the Romans, wishing to turn against Greece, conquered Cephalonia and employed it as their base of operations and the launching of naval attacks against the rest of Greece. In 795 AD, with the division of the Roman State into east and west, the island becomes Byzantine territory, playing an important role in the country's defense against pirates ransacking and destroying the Mediterranean coasts.

From 1185 until about 1470 the island was conquered successively by the Normans, Orsini, Andegans, Tokki, while for some years between 1479-1481 and 1485-1500 it became part of the Ottoman Empire. From 1500 and for about 300 years, it was occupied by the Venetians. During that period, St. George's Castle was the capital (located southwest of Argostoli, in Peratata village), where 15.000 people lived in its interior and the surrounding villages. The Central Administration of the Venetian Officers was installed in the Castle, but due to the port location of Argostoli, the capital was transferred there in 1757. After the collapse of the Venetian reign, the island was conquered by the Democratic French, who controlled the Seven Islands.

During the French occupation, the island became education oriented, with the founding of French schools, national library and a printing house. However, in 1789, after a series of anti-French riots lead by Ousakof and Katir Bei, Russian Turks became the authoritative power. Nevertheless, the Cephalonians, in close collaboration with the other islands representatives, tried to accomplish independence for the Seven Islands. This was made possible by the Istanbul Treaty, which in 1800 declared "The Seven Islands State", the first Greek independent state with its own constitution and flag. Episodes did continue though, with riots lead by Elias Zervos Iakovatos, Gerasimos Livadas and Joseph Momferatos. Also, Typaldos Pretenteris, Ioannis Menagias, Frankiskos Pylarinos and Stamatelos Pylarinos exhibited intense political activity.

In 1807, strong internal conflicts resulted in the dismantling of the state by General Caisar Berthier and the second French Occupation. After two years, the island was conquered by the British with General Oswald as leader. Between 1810-1814 the island was governed by Charles Philip de Bosset, of Swiss origin, who was mainly responsible for its building structural planning and development (Drapano Bridge, Argostoli and Livathos roads, Argostoli's public buildings). Moreover, Governor Charles Jacob Napier constructed, among other projects, Argostoli's Court House, the Customs House, the Agioi Theodori Fanari (Lighthouse) and Markato (market) in Lixouri.

In 1864, history turned a page, with the cessation of the never-ending foreign occupations and the Seven Islands' union with the rest of Greece.