Isla Chiloé was originally settled by the native Indian tribes of Huilliche, Cuncos and Chonos. The island’s name, thus, is derived from "Chilhué", which means “Seagulls Place” Then, during the era of Spanish exploration, its coasts were surveyed by Francisco de Ulloa in 1553, and in 1567 Martín Ruiz de Gamboa settled and gave the island the name of Nueva Galicia. During the 16th century, the first religious missionaries came. These missionaries were Franciscans, members of the Lady of Mercy. Jesuits arrived in 1608 who affectively organized the Evangalization system. In 1767, the Jesuits were expelled from the island, and Chiloe was put under the rule of the Viceroyalty of Perú. Jesuits developed a circular mission, in which missionaries would make yearly travels to the islands, staying for several days in an area and constructing a church. Since there were not enough priests for each church, the Jesuits would hire a layman who would be called an “attorney” who would also provide spiritual help for those in need in the area. This was how the islands were able to marry both the catholic and native faiths. Throughout the 17th and 18th centuries, these churches were made, constructed of natural materials mostly by the native Indians of the territory.  These churches are one of the main highlights on the island and 16 of them were deemed World Heritage Monuments by UNESCO in 2000.

Only in 1826 did Chiloé gain its independence and was incorporated to Chile. Thus, the native culture was largely retained in this island. The main economy now is tourism but locals continue to live off of farming and fishing.

During the second Beagle voyage (1831-1836), Captain Fitz-Roy wrote that foreigners settled in Chiloé used to follow their own traditions, not those of the native people, and so did Chilean Creoles, so that Chiloé inhabitants were "good-hearted, kind and hospitable; nowhere is hospitality so spontaneous". Darwin will add that natives seemed to have only three quarters of indigenous blood... "people are quiet and meek (...). Perhaps this is the only place in South America where you don't have to carry a gun when you travel".