In Ancient times, the island played a minor role during the Persian Wars. In 480 BC, the fleet of the Persian King Xerxes was hit by a storm and was badly damaged on the rocks of the Skiathos coast. Following this the Greek fleet blockaded the adjacent seas to prevent naval invasion and provisions for the enemy of 300 Spartans who stood heroically at Thermopylae pass. The Persian fleet was defeated there at Artemisium and finally destroyed at the Battle of Salamis a year later. Skiathos remained in the Delian League until it lost its independence. The city was destroyed by Philip V of Macedon in 200 BC.
In 1207 the Gyzi brothers captured the island and built the Bourtzi, a small Venetian-styled fortress similar to the Bourtzi in Nafplio, on an islet just out of Skiathos Town, to protect the capital from the pirates. But the Bourtzi was ineffective in protecting the population and in the mid-14th century the inhabitants moved the capital from the ancient site that lay where modern Skiathos Town is to Kastro (the Greek word for castle), located on a high rock, overlooking a steep cliff above the sea at the northernmost part of the island.
In 1704 monks from Athos built the Evangelistria monastery which played a part on the Greek War of Independence as a hide-out for Greek rebels. The first flag of Greece was created and hoisted in the Evangelistria monastery in Skiathos in 1807. Several prominent military leaders (including Theodoros Kolokotronis and Andreas Miaoulis) had gathered there for consultation concerning an uprising, and they were sworn to this flag by the local bishop.
After the War of Independence and demise of piracy in the Aegean, Kastro became less important as a strategic location. In 1830s, the island's capital was moved to the original site — where it still remains. Today, ruins of Kastro are one of tourist attractions. During the 19th century Skiathos became an important shipbuilding centre in the Aegean due to the abundance
