The Palaikastro plain was occupied throughout the Bronze Age. The earliest confirmed habitation, about 2900 B.C. (EM I), was probably on a small scale. So far only one building up on Kastri and two others in the main settlement area have been excavated.

Gradually the population expanded and by about 1900 B.C. (the time of the first palaces at Knossos and Phaistos), a large, well-planned town had been established, with overseas contacts, including Egypt and Asia Minor. Around 1760 B.C. an earthquake caused much damage.
The following phase (MM III) saw reconstruction and a long period of growth, until (perhaps in 1628 B.C.) another earthquake and flooding again caused much damage. An extensive rebuilding programme followed and the ensuing phase (LM IA) was a time of prosperity

Fine houses with spacious rooms were built by rich traders, who filled their storage rooms with finely decorated pottery and stone vases, and kept track of their transactions on tablets written in Linear A.

At the end of this LM IA phase the town suffered the devastating effects of the Theran eruption that caused earthquakes and rained down ash. Once again the town was rebuilt, but the ensuing years were troublesome, with a sequence of fires, most likely due to human aggression, in the early 15th century (late LM IB), when there were widespread destructions across Crete.

Palaikastro also suffered, but here, unlike other towns, the population recovered. Repairs and reconstruction were undertaken during the following century (LM II - LM IIIA) and although there is evidence for a fire around 1370 B.C., contemporary with the final destruction of the palace at Knossos, life continued and prosperity returned.
Finally, around 1300 B.C. (LM IIIB) another earthquake struck, after which the town seems to have been slowly abandoned. People moved and settled for a time (LM IIIC) up on Kastri, but by the end of the 12th century B.C. they had left the coastal plain for the safety of the surrounding mountains.