In 1502 Columbus discovered this island and called it Isla de Los Pinos (Isle of Pines) although it already had a name, Guanaca, used by the natives that inhabited it. This name appears as early as 1511 on a map drawn by Peter Martyr but it later was corrupted by English pirates, privateers and settlers and was pronounced Bonacca. There has been other names for the island over the years before the Bay Islands were turned over to Honduras as the English, the Dutch and the Spaniards modified the name to their liking.
Upon gaining possession of the Bay Islands the Honduran government made Guanaja the official name of the island but the residents kept the old name for as long as they could and older inhabitants throughout the islands still call it Bonacca. The main settlement is called The Cay, an abbreviation of Lower Cays, the original name. It was first settled by the Haylocks who had moved to the two little cays that lay about a half kilometer off the south shore of the main island to get rid of the flies that plagued them during calm nights. They eventually stayed and later sold the southernmost cay (Hog Cay) to the Kirkconnells. Many other families, among others the Bordens, the Phillips and the Woods, came later and by the 1880s a thriving community had developed.
The village of Savana Bight was founded by families from Olancho; they were the Escalantes, the Peraltas, and the Zunigas. Later the Watlers from the Cayman Islands took up residence there as well. Later on and also from Grand Cayman came the Tatums, the Merrens, the Bennetts, the Forbes and others who set up residence east of Savana Bight, calling the area East End, while the Parchmonts settled in some of the upper Cays. The first families to settled in North East Bight were the Ebanks, the Hydes and the Greenwoods. Angelo Elwin, son of the first magistrate of the Bay Island who resided in Roatan, was the first person to settle on the upper north side of the island. Elwin's bride was a Moore and three or four of her brothers followed her from Barbarat to Bonacca. The Moores like the Elwins had come to the Bay Islands from Belize. Unlike other settlers, Angelo Elwin was in possession of a deed signed by the authorities in Roatan which granted him the land between Michael’s Rock and the lower end of the Bay. The Moores acquired properties from Elvin and built their homes in what is now called Mangrove Bight. They were joined later by the Powerys and much later by the Johnsons and the Jacksons.