The island was first settled by Mesolithic and Neolithic peoples. There is archaeological evidence at the sites of Vela Spila(Big Cave) and at Jakas Cave near the village of Zrnovo. The findings at Vela Spila are on display at the Center for Culturein Vela Luka. The fate of these peoples is not known but the sites do provide a window into their way of life.
The second wave of human settlement was by Illyrians. It is believed that the Illyrians arrived in Balkans approximately 1000 BC.They were semi-nomadic tribal people living from agriculture. There are numerous old stone buildings and fortresses (gradine) left behind by the Illyrians.
Melaina Korkyra (Greek: Μέλαινα Κόρκυρα, "Black Corcyra") was the ancient Cnidian Greek colony founded on Korčula. Greek colonists from Corcyra (Corfu) formed a small colony on the island in the 6th century B.C. The Greeks named it "Black Corfu" after their homeland and the dense pine-woods on the island. Greek artifacts, including carved marble tombstones can be found at the local Korčula town museum.
A stone inscription found in Lumbarda (Lumbarda Psephisma) and which is the oldest written stone monument in Croatia, records that Greek settlers from Issa (Vis) founded another colony on the island in the 3rd century BC. The two communities lived peacefully until the Illyrian Wars (220 BC to 219 BC) with the Romans.
The island became part of the Roman province of Illyricum  after the Illyrian Wars. Roman migration followed and Roman citizens arrived on the island. Roman villas appeared through the territory of Korčula and there is evidence of an organised agricultural exploitation of the land. There are archaeological remains of Roman Junianum on the island and old church foundations.
In the 6th century it came under Byzantine rule. The Great Migrations of the 6th and 7th centuries brought Croatian invasions into this region. Along the Dalmatian coast the Croatian peoples poured out of the interior and seized control of the area where the Neretva River enters the Adriatic, as well as the island of Korčula (Corcyra), which protects the river mouth. The Christianisation of the Croats began in the 9th century, but the early Croatian rural inhabitants of the island may well have fully accepted Christianity only later; in the early Middle Ages the Croatian population of the island was grouped with the pagan Narentines or Neretvians, who quickly learned maritime skills in this new environment and became known as pirates.
Initially, Venetian merchants were willing to pay an annual tribute to keep their shipping safe from the infamous Neretvian pirates of the Dalmatian coast. After the 9th century, the island was briefly under nominal Byzantinesuzerainty. In 998 the Principality of Pagania came under Venetian control. Doge Pietro II Orseolo launched a naval expedition along the coast and assumed the title Duke of Dalmatia. Afterwards Korčula came under the control of the Great Principality of Zahumlje.
In the 12th century Korčula was conquered by a Venetian nobleman, Pepone Zorzi, and incorporated briefly into the Venetian Republic. Around this time, the local Korčula rulers began to exercise diplomacy and legislate a town charter to secure the independence of the island, particularly with regard to internal affairs, given its powerful neighbors.