In 1657, Oliver Cromwell granted the English East India Company a charter to govern Saint Helena and, the following year, the company decided to fortify the island and colonise it with planters. The long tradition that the early settlers included many who had lost their home in the 1666 Great Fire of London has been shown to be a myth. The first governor, Captain John Dutton, arrived in 1659, making Saint Helena one of Britain's earliest colonies outside North America and the Caribbean. A fort and houses were built. After the Restoration of the English monarchy in 1660, the East India Company received a royal charter giving it the sole right to fortify and colonise the island. The fort was renamed James Fort and the town Jamestown, in honour of the Duke of York, later King James II of England.
Between January and May 1673, the Dutch East India Company forcibly took the island, before English reinforcements restored English East India Company control. The company experienced difficulty attracting new immigrants, and sentiments of unrest and rebellion arose among the inhabitants. Ecological problems of deforestation, soil erosion, vermin and drought led Governor Isaac Pyke in 1715 to suggest that the population be moved to Mauritius, but this was not acted upon and the company continued to subsidise the community because of the island's strategic location. A census in 1723 recorded 1,110 people, including 610 slaves.
Eighteenth-century governors tried to tackle the island's problems by planting trees, improving fortifications, eliminating corruption, building a hospital, tackling the neglect of crops and livestock, controlling the consumption of alcohol and introducing legal reforms. The island enjoyed a lengthy period of prosperity from about 1770. Captain James Cook visited the island in 1775 on the final leg of his second circumnavigation of the world. St. James' Church was built in Jamestown in 1774, and Plantation House in 1791–1792; the latter has since been the official residence of the Governor.
Edmond Halley visited Saint Helena on leaving the University of Oxford in 1676 and set up an astronomical observatory with a 7.3-metre-long (24 ft) aerial telescope, with the intention of studying stars from the Southern Hemisphere. The site of this telescope is near Saint Mathew's Church in Hutt's Gate in the Longwood district. The 680-metre (2,230 ft) high hill there is named for him and is called Halley's Mount.
Throughout this period, Saint Helena was an important port of call of the East India Company. East Indiamen would stop there on the return leg of their voyages to British India and China. At Saint Helena, ships could replenish supplies of water and provisions and, during wartime, form convoys that would sail under the protection of vessels of the Royal Navy. Captain James Cook's ship HMS Endeavour anchored and resupplied off the coast of Saint Helena in May 1771 on its return from the European discovery of the east coast of Australia and the rediscovery of New Zealand.
The importation of slaves was made illegal in 1792. Governor Robert Patton (1802–1807) recommended that the company import Chinese labour to supplement the rural workforce. The coolie labourers arrived in 1810, and their numbers reached 600 by 1818. Many were allowed to stay, and their descendants became integrated into the population. An 1814 census recorded 3,507 people on the island.