Sanibel and Captiva formed as one island about 6,000 years ago. The first known humans in the area were the Calusa, who arrived about 2,500 years ago. The Calusa were a powerful Indian nation who came to dominate most of Southwest Florida through trade via their elaborate system of canals and waterways. Sanibel remained an important Calusa settlement until the collapse of their empire, soon after the arrival of the Europeans.

In 1765, the first known appearance of a harbor on Sanibel is shown on a map as Puerto de S. Nibel ; thus, the name may have evolved from "San Nibel". Alternatively, the name may derive, as many believe, from "(Santa) Ybel", which survives in the old placename "Point Ybel", where the Sanibel Island Light is located. How it would have gotten this name, however, is a matter of conjecture. One story says it was named by Juan Ponce de León for Queen Isabella I of Castile; the island may indeed be named for this queen or the saint whose name she shares, either by Ponce de León or someone later. Another attributes the name to Roderigo Lopez, the first mate of José Gaspar (Gasparilla), after his beautiful lover Sanibel whom he had left behind in Spain. Like most of the lore surrounding Gasparilla, however, this story is apocryphal, as the above references to recognizable variants of the name predate the buccaneer's supposed reign.