The island was originally chosen by the United Kingdom as a comparatively isolated and healthier alternative to the disease-ridden larger islands of the Solomon Islands archipelago.
In October 2019, the government of Central Province signed a deal to grant the 75-year lease of the entire island of Tulagi to a Chinese company China Sam Enterprise Group.[1] However, this was declared unconstitutional by the Solomon Islands parliament after a week and, consequently, the deal was cancelled.
Allied forces, primarily the 1st Marine Raiders, landed on August 7 and captured Tulagi as part of Operation Watchtower after a day of hard fighting.
After its capture by United States Navy and Marine Corps forces, the island hosted a squadron of PT boats for a year, which included LTJGJohn F. Kennedy's PT-109 as well as other ancillary facilities. A small 20-bed dispensary was operated on Tulagi until its closure in 1946. The island also formed part of Purvis Bay, which hosted many US Navy ships during 1942 and 1943.
Tulagi offers numerous scuba diving locations. The wrecks of USS Aaron Ward, USS Kanawha, and HMNZS Moa are close by, and the wrecks of Ironbottom Sound are not much further off, to the south and west. These three ships were all sunk in the same Japanese naval air raid, part of the Operation "I" on April 7, 1943. The Ward lies upright and intact, its deck replete with artifacts, on a sandy bottom at 70 metres (230 feet).