It is believed that the island of Krapanj was named by the Greeks after the Jadrtovac Mud (gr. Kopranon), where the people of Krapanj still have vineyards. Another legend says that in the time of high tides, when the sea used to flow into the cellars, the island was completely under water. When the sea withdrew, the edges of the island were left in mud.

Before people began to settle the island, Krapanj was covered with green woods and, according to old documents, it was considered the pride of the region. It used to belong to the Church of Šibenik and was later sold to Toma Jurić, an aristocrat from Šibenik. He started a construction of a chapel on the island.
The construction of the chapel began in 1436 after it won the approval from Pope Eugene IV.

In his will of testament, Toma Jurić left the island to the Franciscan friars. His five sons met with Franciscan friars on December 5, 1446 to discuss the fate of the island. It was agreed that construction and pasture on the island were not to be allowed, and that the land was not to be sold or bestowed to anyone. The Church of the Holy Cross on the island of Krapanj was sanctified in 1523.

The settling of the island of Krapanj began with the invasion of Turks, when people were forced to seek refuge in the safer regions. Already in 1500, there were 200 small country houses on the island (according to the Villages of the Šibenik Region, by Krsto Stošić). Since they settled on the island with no source of drinking water, with no pastures or cultivable land, all of which is needed to lead a normal life, the newcomers started turning to the sea to ensure their survival.