In Pre-Columbian times the island was sacred to the Mayan moon goddess, Ix Chel. When the Spanish arrived here in the 16th century they named it "Isla Mujeres" meaning "Island of Women" because of the many cult images of the moon goddess here.

There was a small Mayan temple on the south tip of the island, however in 1988 Hurricane Gilbert caused extensive damage to it, leaving most of the foundation and a very small portion of the temple.

Since the 1970s there has been substantial development for tourism here. Ferry boats run every half hour during daylight between Isla Mujeres and Puerto Juárez or Puerto Cancún on the mainland. The island is popular with day trippers, but activity quiets down in the evening after the tour groups leave. There are numerous places to eat fresh seafood, as well as Maya cuisine. Hotel prices vary from cheap to very expensive at the resorts on the southwest end such as Hotel Villa Rolandi. On the east is the Caribbean Sea with a strong surf and rocky coast, and on the west the skyline of Cancún is seen across the clear waters. On the north end is Isla Town, which harbors the famous Hidalgo Street, where many shops and restaurants are located. Also located on the north end is a famous beach called Playa del Norte which has recovered quickly since Hurricane Wilma hit the area in 2005.

Isla Mujeres is located close to one of many coral reefs, and the area is popular for its snorkeling and scuba diving. Isla Mujeres is also home to a population of sea turtles. Because of the recent endangerment of sea turtles in the area, a facility was set up on the southern end of the island for the rehabilitation and breeding of them. This facility is open to the public.

Its relative proximity to Cuba has made it one of the favorite stepping stones of Cubans trying to reach the United States in recent years.