Finds of fine red cord-marked pottery indicate that Penghu was visited by people from southwestern Taiwan around 5,000 years ago, though not settled permanently.Han Chinese from southern Fujian began to establish fishing communities on the islands in the 9th and 10th centuries, and representatives were intermittently stationed there by the Southern Song and Yuan governments from around 1170. The islands are described in some detail in Wang Dayuan's Dao Yi Zhi Lue (1349). In the 15th century, the Ming ordered the evacuation of the islands as part of their maritime ban. When these restrictions were removed in the late 16th century, fishing communities were re-established on the islands, so that passing Portuguese mariners named the islands the "Pescador" (fisherman) islands. The Ming established a military presence in 1603, repelling a Dutch attempt to establish a base on the islands in 1622. From the middle of the 17th century to 1895, Taiwan and the archipelago were ruled by the Koxinga kingdom (Tungning) and then the Qing Dynasty.
The Penghu archipelago was captured by the French in March 1885, in the closing weeks of the Sino-French War, and evacuated four months later. The Pescadores Campaign was the last campaign of Admiral Amédée Courbet, whose naval victories during the war had made him a national hero in France. Courbet was among several French soldiers and sailors who succumbed to cholera during the French occupation of Penghu. He died aboard his flagship Bayard in Makung harbour on 11 June 1885.
Defeated in northern China by the Japanese in the First Sino-Japanese War, the Qing government ceded the islands to Japan along with Taiwan in the Sino-Japanese Treaty of Shimonoseki of April 1895. The Japanese suspected that they might meet resistance when they attempted to occupy Taiwan, and their invasion of Taiwan, hastily launched in late May 1895 in response to the proclamation of the Republic of Formosa, was preceded by an attack on Qing forces on Penghu in March 1895, in which the Japanese defeated the Chinese garrison of the islands and occupied Makung. The Japanese occupation of Penghu prevented more Chinese troops from being sent to Taiwan, persuaded the Chinese negotiators at Shimonoseki that Japan was determined to annex Taiwan, and helped to ensure the success of the subsequent Japanese invasion of Taiwan.
In the Cairo Declaration of 1943, the United States, United Kingdom, and China stated it to be their purpose that "all the territories that Japan has stolen from the Chinese, such as Formosa and The Pescadores, shall be restored to the Republic of China." On 26 July 1945, the three governments issued the Potsdam Declaration, declaring that "the terms of the Cairo Declaration shall be carried out." In the Treaty of San Francisco signed in 1951 and coming into effect in 1952, Japan renounced sovereignty over Taiwan and Penghu but left their final disposition unsettled. The archipelago has been administered by the Republic of China since that time.
In the early 1990s, the Penghu National Scenic Area that comprises most but not all of the islands and islets of the archipelago was created. Tourism has since become one of the main sources of income of the county.
The main islands of Magong City/Huxi Township, Baisha Township, and Xiyu Township are the three most populous islands and are connected via bridges. Two shorter bridges connect Huxi and Baisha. The bridge connecting Baisha and Xiyu is the longest bridge in the Republic of China and is called the Penghu Trans-Oceanic Bridge (澎湖跨海大橋 Peng Hu Kua Hai Da Qiao).
Loir, Maurice (1886), L'escadre de l'amiral Courbet, Paris: Berger-Levrault.
Takekoshi, Yosaburo (1907), Japanese Rule in Formosa, London: Longmans.
Wills, John E., Jr. (2006), "The Seventeenth-century Transformation: Taiwan under the Dutch and the Cheng Regime", in Rubinstein, Murray A., Taiwan: A New History, M.E. Sharpe, pp. 84–106, ISBN978-0-7656-1495-7.