The first people who lived in Puerto Rico were hunter-gatherers who reached the island more than 1,000 years before the arrival of the Spanish. The Taino lived in small villages led by a cacique, or chief. In the late 15th century about 20,000–50,000 Taino lived on Puerto Rico, which they called Boriquén (Borinquén, or Boriken). The Taino rarely warded off attacks by their Carib neighbours from islands to the south and east, including the Virgin Islands and Vieques Island. At the island of Guadeloupe the Spaniards rescued several Taino prisoners whom the Carib had taken from Boriquén, and Columbus agreed to return them to their island. On November 19, 1493, Columbus anchored in a bay on the west coast of Boriquén, which he promptly renamed San Juan Bautista (“Saint John the Baptist”) and claimed for the Spanish monarchs Ferdinand II and Isabella I. Columbus and his men spent two days on the island before sailing westward to Hispaniola, where they established the first permanent settlement in the New World.

For 15 years San Juan Bautista was neglected except for an occasional visit by a ship putting in for supplies. In 1508 Juan Ponce de León, who had was with Columbus and who also worked to colonize Hispaniola, was given permission to explore the island. On the north coast Ponce de León found an very well-protected bay that could harbor a big number of sailing vessels; on high ground beside the bay he founded Caparra, the island's first town and the site of its first mining and agricultural operations. Through time and common usage the port became known as San Juan while the name Puerto Rico came to be applied to the whole island. The Taino soon lost admiration for their Spanish “protectors,” who expected the Indians to act as vassals, paying tribute in gold and food as well as accepting instruction in the Christian religion. Meanwhile, European diseases (to which the Spaniards were largely immune) and maltreatment had begun to devastate the Taino population. The Spanish then brought Indian slaves from close islands and black slaves from Africa in order to fully staff their placer mines. Carib groups from neighboring islands made frequent raids, carrying off food and slaves and destroying property. Puerto Rico was further damaged by disease, and it was looted by French, British, and Dutch pirates. During the mid-16th century French forces constantly burned and sacked San Germán, the island's second settlement. Increasing numbers of colonists left the island. At first they built a armed palace for the governor called La Fortaleza (“The Fortress”), followed by the massive San Felipe del Morro (El Morro) castle, which was perfectly located to control the narrow entrance to the harbor. In the early 17th century the city was surrounded by a stonewall 25 feet (8 meters) high and 18 feet (5 meters) thick, two parts of which still stand. These defenses made San Juan almost unconquerable.

In 1595 Sir Francis Drake attacked the city with a sizable fleet but failed to silence its guns. In 1625 the Dutchman Bowdoin Hendrik captured and burned the town but failed to subdue El Morro, where the governor had taken refuge. San Juan, the most exposed military outpost guarding Spain's New World Empire, received political and economic attention from the mother country; however, the island's rural inhabitants, or jíbaros, were usually ignored by Spain and disrespected by the residents of San Juan. As the French, British, Danish, and Dutch fought over and settled the Lesser Antilles during the 17th and 18th centuries, the colonial authorities of San Juan rarely ventured beyond their walled defenses for fear of pirate attacks; however, the jíbaros, ignoring the laws of Spain, prospered somewhat by trading in secret with non-Spanish merchants. Ginger, hides, sugarcane, tobacco, and cattle from the island were in great demand. The settlers' contact with foreigners did not turn them away from their mother country—as the Spanish crown had feared—instead, they remained loyal and willing to participate in military expeditions.