It was colonized by Cretans around 1500 BC, when both island and town were known as Peparethos. There has been a settlement on the site of Skopelos Town since at least the eighth century BC, when it was ruled by Chalcis, modern Chalkida, on Euboea, today Evvia.

Peparethos was one of three “cities” on the island, along with Panormos and Selinous (modern Loutraki). While excavations continue on the town’s fourth century BC asklepion, or healing temple, dedicated to the god of healing, Asclepius, little remains of these early settlements. The oldest structure in Skopelos Town is the 11th century Aghios Athanassios church below the ruined 13th century Venetian Kastro above the town. The castle was built on the fifth century BC foundations of ancient Peparethos, still visible now. Most of the fifteen other churches in the town date from the 15th century and later.

Skopelos Town survived the rule of Macedon, Rome, the Byzantine Empire, Venice and the Ottoman Empire, largely untouched by the hand of history. Contrary to myth, the inhabitants were not wiped out in a raid by Barbarossa in the 14th century; some survived to resume agriculture and its key industry, shipbuilding, which would see town and island aiding the Greek navy prior to and in the War of Independence against the Ottoman Empire of 1821-1828, after which the island became part of the First Hellenic Republic. Its shipbuilders were famous across Greece and as far as Romania and the Black Sea, but the craft went into decline with the advent of steam. Those skills translated into carpentry, which, along with agriculture, fishing, trades and services, is today among the town’s main enterprises outside tourism.