Sveti Stefan, one of the most exclusive summer resorts on the Mediterranean, is a result of a modern refurbishment of the stone houses on the island, built more than five centuries ago for the population of the nearby villages to find a place of shelter from the attacks of pirates and the Turks. According to oral tradition, the Pastrovici tribe used the spoils taken from Turkish galleons to fortify the island in 1442, building 12 houses, one each for every family in the Pastovici. For nearly 300 years, it was a trade and transport centre for the Pastrovici and the seat of the Bankada – the tribal court of the Pastrovici. The village was named after the church located on the highest point of the island, dedicated to the Saint Archdeacon Stefan. The island is also home to the churches of the Resurrection and St Alexander Nevsky.
Sveti Stefan had remained a fishing village for several centuries, until its depopulation began in 1950 in order to build a series of luxury suites and rooms in the old stone houses. The new hotel-town was opened on 13 July 1960 and it has since been a holiday destination for celebrities from all over the world – including Sofia Loren and Carlo Ponti, Alberto Moravia, André Malraux, Richard Widmark, Kirk Douglas, Klaus Kinski, Monica Vitti, Sylvester Stallone, Yuri Gagarin, Boris Spasky, Bobby Fisher… and members of royalty, numerous politicians and wealthy Arab Sheiks.