The formation of Muhu Island began about 8000 years ago when the island slowly rose out of the sea. The process of elevation actually continues up to this very day. The first people inhabited the island around 2500 years BC.
It was on Muhu Island where the scanty findings from the Bronze Age include some of the oldest items of that time to be found in Estonia, for example a spearhead originating from the 15th –14th century BC.

By the end of ancient times a stronghold was established in Muhu, the ruins of which can still be seen today while passing by the Linnuse village on the Kuivastu–Kuressaare road.
In 1227, a heavy battle was fought in that stronghold by the order of the Brethren of the Sword against the islanders – a battle which is described by the contemporary chronicler Henry of Livonia. The battle lasted 7 days and involved an army of as much as 20.000 mercenaries from the mainland. This battle is considered to have been decisive in bringing Estonia for the centuries to come under foreign rule.

The old Gothic-style church in the centre of Muhu was built shortly after the conquest, at the end of the 13th century; the church is devoted to St. Catherine.
The fact that as early as 1532, so called yeomen lived in Koguva village -free men, who were freed from serfdom which prevailed elsewhere as late as the 19th century- made Muhu already then a remarkable community.

In the 19th century about 70% of the islanders converted to Russian Orthodoxy as a result of an active policy by Tsar Nikolai I, in which land was distributed to converts. In Muhu, this period is marked by the building of two charming Orthodox churches, in Hellamaa and in Rinsi.

Muhu has also been known for its wandering craftsmen and builders who would work on the mainland, and even as far as in St. Peterburg and Riga. Their skills were behind the Muhu architectural style, which has acquired certain fame, a fine example can today still be seen in the outbuildings of Pädaste Manor.  

In the beginning of the 20th century the population of Muhu had grown to around 6000 people, which by the end of the last century decreased to about 2000 inhabitants currently.

Several Muhu people have influenced Estonian cultural- and science-life, such as writers and poets Grünthal-Ridala, Juhan Smuul, Aadu Hint, Madis Küla-Nurmik; artists Vive Tolli, Arseni and Ants Mölder; scientists Alexander Schmidt, Jüri Kann, Toomas Saat, Raivo Vokk.

The inhabitants of Muhu call themselves Muhu people; a self chosen title which radiates a certain pride and feeling of being different from mainlanders or communities on other islands.