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Of Greek foundation, the city evidently derived its name from its situation on a lofty and precipitous rock, forming a bold headland (Κεφαλὴ) projecting into the sea. But though its name proves it to have been of Greek origin, no mention is found of it in Thucydides, who expressly says that Himera was the only Greek colony on this coast of the island (vi. 62); it is probable that Cephaloedium was at this time merely a fortress (φρούριον) belonging to the Himeraeans, and may very likely have been first peopled by refugees after the destruction of Himera. Its name first appears in history at the time of the Carthaginian expedition under Himilco, 396 BC, when that general concluded a treaty with the Himeraeans and the inhabitants of Cephaloedium. (Diod. xiv. 56.) But after the defeat of the Carthaginian armament, Dionysius the Elder made himself master of Cephaloedium, which was betrayed into his hands. (Ibid. 78.) At a later period we find it again independent, but apparently on friendly terms with the Carthaginians, on which account it was attacked and taken by Agathocles, 307 BC. (Id. xx. 56.) In the First Punic War it was reduced by the Roman fleet under Atilius Calatinus and Scipio Nasica, 254 BC, but by treachery and not by force of arms. (Id. xxiii., Exc. Hoesch. p. 505.) Cicero speaks of it as apparently a flourishing town, enjoying full municipal privileges; it was, in his time, one of the civitates decumanae which paid the tithes of their corn in kind to the Roman state, and suffered severely from the oppressions and exactions of Verres. (Cic. Verr. ii. 5. 2, iii. 43.) It also minted coins. No subsequent mention of it is found in history, but it is noticed by the geographers Strabo, Pliny, and Ptolemy, among the towns of Sicily, and at a later period its name is still found in the Itineraries. (Strab. vi. p. 266; Plin. iii. 8. s. 14; Ptol. iii. 4. § 3; Itin. Ant. p. 92; Tab. Peut.).

During the Byzantine domination the settlement was moved from the plain to the current spur, although the old town was never entirely abandoned. In 858, after a long siege, it was conquered by the Arabs, and rechristened Gafludi. For the following centuries it was part of the Emirate of Sicily.

In 1063 the Normans captured it and in 1131, Roger II, king of Sicily, transferred it from its almost inaccessible position to one at the foot of the rock, where there was a small but excellent harbor, and began construction of the present cathedral. Between the 13th century and 1451 it was under different feudal families, and then it became a possession of the Bishops of Cefalù.

During the Risorgimento, the patriot Salvatore Spinuzza was shot here in 1857. Cefalù became part of the Kingdom of Italy in 1861.