Settlers arrived from northern and southern India between 500 and 300 BC. They settled along the river banks of the northern and southwestern plains. The Sinhalese, who converted to Buddhism in the 3rd century, came from northern India. The Tamils came from the southern states of India and settled in the Jaffna peninsula, still the centre of Sri Lankan Tamil culture.

Both groups cultivated rice, using large-scale irrigation systems in the northern and eastern areas of the island. Sri Lankans were the greatest irrigators of the ancient world; even modern technology would find it difficult to better their feats of engineering.

The island was often a target of invasion from powerful states in southern India. In the 12th century, after repeated invasions from the Chola empire, the Sinhalese moved their capital further south. They became separated from the Tamils by a belt of mountains and dense forest, and set up new cities on the coast and in the inland hills. A strong Tamil kingdom with its capital in Jaffna was established in the north. During this period, the first Arab merchants of Islamic faith arrived and settled on the island.

The 16th century saw the beginning of 450 years of European colonialism in Sri Lanka, which was then known as Ceylon. Portuguese colonists were eventually expelled by the Dutch, who were later succeeded by the British. The British introduced the English language through missionary schools, built roads and railways, and established cinnamon, tea and rubber plantations. Thousands of Tamils from southern India were brought to the country to work on these plantations. Tamils of Indian origin now account for about 5% of the Tamil population.

In 1948, Ceylon became an independent state within the British Commonwealth (although the country's name did not change to Sri Lanka until 1972). In 1956, the government declared Sinhala the country's official language. The Tamils, who constitute almost 20% of the population, felt endangered as an ethnic minority; relations between Tamils and Sinhalese grew increasingly strained.

In 1983, underlying tensions escalated into a pattern of killings, retaliation and revenge. Since then, thousands civilians on both sides have been threatened, tortured and killed. A 1987 Indian-Sri Lankan agreement that sent Indian peace keeping forces into the island ended up in failure by 1990, when violence resumed. Peace negotiations have encountered resistance from both Sinhalese and Tamil militant groups. One Tamil militant organization, the Liberation Tigers of Tamil Eelam, wants an independent Tamil state; they now control much of northern and eastern Sri Lanka. Not all Tamils are separatists, however. Many support a Canadian form of federalism and want to reach a peaceful settlement. Yet the armed conflict continues, and many Sri Lankans seek political asylum elsewhere.