Archaeological excavations provide evidence of settlements going back to before 8000 BC. There are some burial mounds on the island, as well as an oldTing place. Relics of antiquity are found all over the island. Burial mounds, passage graves, and dolmens bear witness of human activity through more than 10,000 years.
As for its more recent history, the period of the duchies is of special interest. During this period — from the 14th century to the year 1864 — Ærø was united and separated, alternately, into a number of enclaves. Ærø was outside the tariff wall of the Kingdom, leading to flourishing smuggling which was a way of living for many of Ærø's inhabitants.
In 1629, the main town of Ærøskøbing burnt down in a great fire. There was no other disaster of comparable scale. In 1750 the island, previously split intoexclaves of numerous duchies, was united as single administrative district.
Until 1864, Ærø was part of the Danish Duchy of Schleswig — the area of Schleswig/Southern Jutland is now divided between Denmark (Northern Schleswig) and Germany (Southern Schleswig). King Christian IV's cousin, also named Christian, was the Duke of Ærø from 1622 to 1633, and lived with his concubine Cathrine Griebels at Gråsten Manor House.
When the Duke died, a banner was found at Gråsten composed of nine pieces of cloth and in three colours — body colour, sea green, and golden yellow. This banner has provided the inspiration for the flag of Ærø which is seen today all over the island. When Duke Christian died, Ærø was distributed among four of his brothers, and this offers one explanation of why two towns developed in the island, Ærøskøbing and later on Marstal, and why each came to be in their own "country".
Gråsten Manor House was abolished in 1766 and the buildings were demolished. The name of Gråsten is still alive today in the farmhouse that stands almost on the same spot as the ducal manor. Gråsten of
