Palmyra was first sighted in 1798 by American sea captain, Edmund Fanning of Stonington, Connecticut, while his ship the Betsy was in transit to Asia, but it was only later—on November 7, 1802—that the first western people landed on the uninhabited atoll. On that date, Captain Sawle of the American ship Palmyra was wrecked on the atoll.
In 1859, Palmyra was claimed both by the American Guano Company and the United States Guano Company, but the following year it was awarded to the second company which however never started mining for guano in accordance with the Guano Islands Act of 1856. Most likely this was because there was no guano. Palmyra is located close to the Intertropical convergence zone; there is too much rain for guano to accumulate. In the meanwhile, on February 26, 1862, His Majesty Kamehameha IV (1834-1863), Fourth King of Hawai'i (1854-1863), issued a commission to Captain Zenas Bent and Johnson B. Wilkinson, both Hawaiian citizens, to sail to Palmyra and to take possession of the atoll in the king's name and on April 15, 1862 it was formally annexed to the Kingdom of Hawai'i.
Captain Bent sold his rights to Palmyra to Mr. Wilkinson on December 24, 1862 and from 1862 to 1885, Kalama Wilkinson owned the island which was divided in 1885 between three heirs, two of which immediately transferred their rights to a certain Wilcox (?) who, in turn, transferred them to the Pacific Navigation Company. The latter entity made an attempt to colonize the atoll by sending a married couple to live there between September 1885 and August 1886.
In 1898 Palmyra was annexed to the U.S. in conjunction with the overall U.S. annexation of Hawai'i. In the period preceding the formal annexation of the atoll by the U.S., the U.K. had shown interest for the atoll to become part of the "Guano Empire" of John T. Arundel & Co; and in 1889 the British had even formally annexed it. In order to end all further British attempts or contestations, a second, separate act of annexation of Palmyra by the U.S. was made in 1911.
Afterwards, by a series of agreements signed between 1888 and 1911, the Pacific Navigation Company transferred its interests to Henry Ernest Cooper Sr. (1857–1929). The third heir of Kalama Wilkinson transferred his rights to a Mr. Ringer, whose children in turn also transferred their rights to Henry Ernest Cooper Sr. (s.a.) in 1912 and who then became the sole owner of the atoll.
In 1922 Cooper sold the whole atoll except some minor islets (the 5 "home islands") to Leslie and Ellen Fullard-Leo on August 19 for $15,000.00. The latter party established the Palmyra Copra Company to exploit the coconuts growing on the atoll. Their heirs continued as proprietors afterwards, except for a period of Navy administration during World War II.
In 1934, Johnston Atoll, Kingman Reef, and Palmyra were placed under the Department of the Navy. When the U.S. Navy took over to use the atoll as a naval air base, the atoll was owned privately by Hawaiian and American citizens. After the war, the Fullard-Leos fought for the return of Palmyra all the way to the U.S. Supreme Court and won in 1947. When Hawai‘i achieved statehood in 1959, Palmyra was explicitly separated from the new state; prior to that point in time, Palmyra Atoll was officially part of the City & County of Honolulu.
In July 1990 Peter Savio of Honolulu took a lease on the atoll until the year 2065 and formed the Palmyra Development Company. In January 2000, the atoll was purchased by The Nature Conservancy for the purposes of coral reef conservation and research.
In November 2005, a worldwide team of scientists has joined with The Nature Conservancy to launch a new research station on the Palmyra Atoll in order to study climate change, disappearing coral reefs, invasive species and other global environmental threats.