In the 15th century, the fortified village was built to defend against the Turks and became a haven for pirates of the Adriatic. Initially, the island with its fortress had 12 families.
In the 1800s, a village came to be established on the island with a population of about 400 people. Villa Miločer was built between 1934 and 1936 and was the summer residence of Queen Marija Karadordevic of Serbia.
After the villagers had been moved to the mainland by the authorities, the island village became an exclusive resort frequented by high-profile elites of the world.
The hotel on the island is now a 5-star franchise hotel of an international hotel group. Sveti Stefan is now connected to the mainland by a narrow isthmus.

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