The history of organized European colonization on the Islands began with the Danish East India Company in 1754/56 when they were administrated under the name of Frederiksøerne from Tranquebar (in continental Danish India); they were repeatedly abandoned: 1784 - 1807/09, 1830 - 1834 and finally from 1848 gradually for good. From 1778 till 1783 these islands were a colony of Austria but they later failed.

Danish involvement ended formally on 16 October 1868 when the Danish rights to the Nicobar Islands were sold to Britain, which made them part of British India by 1869 when the British took possession..

On 26 December 2004 the coast of the Nicobar Islands was devastated by a 10-15 m high tsunami following the 2004 Indian Ocean earthquake. At least 6000 people (possibly a conservative estimate) were believed to have been killed on the Andaman and Nicobar Islands during the disaster. Reports put the death toll on Katchal Island alone at 4,600. Several islands were heavily damaged with initial reports of islands broken in two or three pieces and coral reefs moved above water. Teressa Island was said to have been split into two pieces and Trinket Island into three pieces. Some estimates said that the islands were moved as much as 100 feet (30 m) by the earthquake. Indira Point was reported beneath sea level and its light station and crew missing. Surveyors were dispatched, as initial reports were considered unreliable.

More than two months after the disaster, no contact had been made with seven bands totaling about 150 of the 389 total Shompen.