The hill of Phaistos was inhabited as early as the Final Neolithic period (4500 - 3200 BC), when an extensive Neolithic settlement was established, succeeded by a settlement of the Prepalatial period (3200 - 4900 BC). These early settlements were followed by the foundation of the First Palace of Phaistos (1900- 1700 BC), which was built on the NE part of the hill in order to control the whole of the fertile plain of the Messara.Around this palace arose, in the Minoan period, the extensive city of Phaistos, which continued to flourish until Hellenistic times (323-67 BC).The First Palace was built around 1900 BC.
It was extensive, covering an area of approximately 8.000 sq.m, and spread over the three stepped terraces of the hill. It was inhabited for about two and a half centuries, during the course of which it was destroyed and rebuilt three times, and was destroyed for the last time by earthquake in about 1700 BC. After the final destruction, its ruins were covered in a thick layer of lime mixed with clay and pebbles, on which the New Palace was built.