The historic city of Phalasarna was founded around the 5th century BC as a port city of the inland city of Polyrrhenia.

Phalasarna had in ancient times an enclosed artificial naval harbor, connected to the sea by a canal. It was carved out of the coastal cliffs, measuring 100 × 75 meters. As a fortification, the harbor had four towers dating from the 4th century BC. In the 3rd century BC, Phalasarna was an important trading post, however, the main source of income was piracy. In 69-67 BC the Romans sent forces to eliminate piracy, stormed Phalasarna, blocked its harbor with massive masonry, and destroyed the city. A major earthquake in 365 AD, and the resulting uplift of the land mass near Phalasarna by six to nine meters, drained the harbor basin.

The location of the city was then forgotten. It was rediscovered in the 19th century and excaveted from the 1960s on.

The small church of Agios Georgios is just outside the excavation site