Before the arrival of the first white settlers, the Narragansett Indians inhabited the area from what is now Providence south along Narragansett Bay. Their principal rivals, the Wampanoag, dominated the eastern shore region.
In 1524, Florentine navigator Giovanni da Verrazano, sailing in the employ of France, became the first European to explore Rhode Island. The earliest permanent settlement was established at Providence in 1636 by English clergyman Roger Williams and
The early 18th century was marked by significant growth in agriculture and commerce, including the rise of the slave trade. Having the greatest degree of self-rule, Rhode Island had the most to lose from British efforts after 1763 to increase the mother country's supervision and control over the colonies. On 4 May 1776, Rhode Island became the first colony formally to renounce all allegiance to King George III. Favoring the weak central government established by the Articles of Confederation, the state quickly ratified them in 1778, but subsequently resisted the centralizing tendencies of the federal constitution. Rhode Island withheld ratification until 29 May 1790, making it the last of the original 13 states to join the Union.
The principal trends in 19th-century Rhode Island were industrialization, immigration, and urbanization. The state's royal charter (then still in effect) contained no procedure for its amendment, gave disproportionate influence to the declining rural towns, and conferred almost unlimited power on the legislature. In addition, suffrage was restricted by the general assembly to owners of real estate and their eldest sons. Because earlier, moderate efforts at change had been virtually ignored by the assembly, political reformers decided to bypass the legislature and convene a People's Convention. Thomas Wilson Dorr, who led this movement, became the principal draftsman of a progressive "People's Constitution," ratified in a popular referendum in December 1841. A coalition of Whigs and rural Democrats used force to suppress the movement now known as Dorr's Rebellion, but they bowed to popular pressure and made limited changes via a new constitution, effective May 1843.
The latter half of the 19th century was marked by continued industrialization and urbanization. Immigration increased and became more diverse. Politically the state was dominated by the Republican Party until the 1930s. The Democrats, having seized the opportunity during the New Deal, consolidated their power during the 1940s, and from that time onward have captured most state and congressional elections. Present-day Rhode Island, though predominantly Catholic and Democratic, retains an ethnic and cultural diversity surprising in view of its size but consistent with its pluralist traditions. Rhode Island's residents have been moving from the cities to the suburbs, and in 1980 the state lost its ranking as the most urban state in the country to New Jersey. In the mid-1990s Rhode Island was still the nation's 2nd most densely populated state, with more than three-quarters of its residents living within 15 mi (25 km) of the capital city of Providence.
From the 1950s to the 1980s, 30% of the workforce were in manufacturing jobs; in the 1990s many of these were still low-paid jobs in the jewelry and textile industries. Rhode Island experienced a real estate boom in the 1980s thanks to federal savings and loan deregulation and the state's proximity to the thriving Boston metropolitan area. However, real estate values declined at the end of the decade, and Rhode Island entered the 1990s with a banking crisis that forced its government to spend taxpayer dollars propping up uninsured financial institutions.
The state was also hard hit by the recession of the early 1990s. By 1994 a slow recovery was under way, with unemployment fluctuating between 6% and 8%. Though the state's economy grew less quickly than that of its New England neighbors, it experienced a full recovery by the end of the 1990s and successfully made the transition from a manufacturing-based system to one reliant on the service sector. Further, it had done so without widening the gap between rich and poor, an achievement that had eluded other states. As of 1999, Rhode Island's unemployment was 4.1%, in line with the national average. Between January 1999 and January 2000 alone, the state added 10,300 jobs. By 2001, however, the nation was in the grip of recession, and Rhode Island's unemployment rate by July 2003 was 5.6%, albeit below the national average of 6.2%. The state faced a $200 million budget deficit that year.
Rhode Island was the setting for a landmark lawsuit settlement in 1999. Three years earlier, the worst oil spill in the state's history contaminated waters and destroyed lobsters in Block Island Sound. Under the federal Oil Spill Act of 1990, those responsible for the spill settled separately with local lobstermen and the state, which was to direct $18 million in ongoing cleanup and recovery efforts. The cases were expected to set the standard for future negotiations in the wake of oil spills.
Republican Governor Donald Carciere, elected in 2002, allowed a minimum wage increase of 60 cents to become law without his signature in 2003. Rhode Island's minimum wage law effective January 2004 was to be $6.75 per hour. In 2003, Carciere pledged to revamp state government, create jobs, and balance the budget without raising taxes.