Kangaroo Island was separated from mainland Australia by a rise in sea level about 9,000 years ago. Stone tools found suggest that Aboriginal people occupied the land at least 11,000 years ago; it is supposed that they disappeared in 200 BC. Theories about the cause include disease and inbreeding, warfare, climatic change or exodus.
In 1802 British explorer Matthew Flinders named the land "Kanguroo (sic) Island" after landing near Kangaroo Head on the north coast of Dudley Peninsula. He was closely followed by the French explorer Nicolas Baudin, who mapped much of the island (which is why so many areas have French names). Although the French and the British were at war at the time, the men met peacefully. They both used the fresh water seeping at what is now known as Hog Bay near Frenchman's Rock; the community is now called Penneshaw.
An unofficial community of sealers and others was set up on Kangaroo Island from 1802 to the time of South Australia's official settlement in 1836. The first ship to arrive was the Duke of York commanded by Captain Robert Clark Morgan. The sealers were rough men and several kidnapped Aboriginal women from Tasmania and mainland South Australia. The women were forced to do the work of sealers, amongst other activities. Three Aboriginal women tried to escape and swim back to the mainland; one is on record as having survived the journey.
The biggest town on Kangaroo Island is Kingscote. Originally established at Reeves Point on 27 July 1836, it is South Australia's first official European settlement. It was later suggested that Kingscote could serve as the capital of South Australia, but the island's resources were insufficient to support such a large community, so the settlement of Adelaide was chosen.
Penneshaw, the second largest town on Kangaroo Island, has a population of around 300, and is located on the north eastern tip of the Dudley Peninsula, on the eastern end of the island. It is home to the ferry terminal which brings most of the visitors to the island, along with all the necessary freight to sustain the local population. Parndana is the third largest town on Kangaroo Island, and is home to a population of around 150, however most of this population do not live in the town, they are sprawled within a few kilometres. The historic area to the south-east of the township, known as the Research Centre to locals, was home to the research station that was set up in the 1940s and 1950s to research the viability of agriculture in the area, and is still home to a small settlement of about 20 people. American River is the fourth largest town on the Island and is home to about 120 residents. Penneshaw, Parndana and American River each have basic facilities, including a general store and fuel and all are home to hotels.
Facilities such as banking and large supermarkets are only available in Kingscote, although all towns have EFTPOS facilities of some sort.