Phaistos was inhabited from about 4000 BC. A palace, dating from the Middle Bronze Age, was destroyed by an earthquake during the Late Bronze Age. Knossos along with other Minoan sites was destroyed at that time. The palace was rebuilt toward the end of the Late Bronze Age. The first palace was built about 2000 BC. This section is on a lower level than the west courtyard and has a nice facade with a plastic outer shape, a cobbled courtyard, and a tower ledge with a ramp, which leads up to a higher level. The old palace was destroyed three times in a time period of about three centuries. After the first and second disaster, reconstruction and repairs were made, so there are distinguished three construction phases. Around 1400 BC, the invading Achaeans destroyed Phaistos, as well as Knossos. The palace appears to have been unused thereafter, as evidence of the Mycenaean era have not been found. The Old Palace was built in the Protopalatial Period, then rebuilt twice due to extensive earthquake damage. When the palace was destroyed by earthquakes, the re-builders constructed a New Palace atop the old.Several artifacts with Linear A inscriptions were excavated at this site. The name of the site also appears in partially deciphered Linear A texts, and is probably similar to Mycenaean ‘PA-I-TO’ as written in Linear B. Several kouloura structures (subsurface pits) have been found at Phaistos. Pottery has been recovered at Phaistos from in the Middle and Late Minoan periods, including polychrome items and embossing in imitation of metal work. Bronze Age works from Phaistos include bridge spouted bowls, eggshell cups, tall jars and large pithoi.

The levels of the theater area, in conjunction with two splendid staircases, gave a grand access to the main hall of the Propylaea with the high doors. A twin gate led directly to the central courtyard through a street with a large width. The splendour of the rooms interior owed to the investment of the floors and walls with plates of sand and white gypsum stone. To the upper floors of the west sector existed spacious ceremonies rooms, although their exact restoration was not possible. A brilliant entrance from the central courtyard was leading to the royal apartments in the north part of the palace, which they had view to the tops of Psiloritis, while for their construction had been used alabaster among other materials. For the princes particular rooms were used, smaller and less luxurious than the rooms of the royal departments.

References to Phaistos in ancient Greek literature are quite frequent. Phaistos is first referenced by Homer as “well populated”, and the Homeric epics indicate its participation in the Trojan war. The historian Diodorus Siculus indicates that Phaistos, together with Knossos and Kydonia, are the three towns that were founded by the king Minos on Crete. Instead, Pausanias and Stephanus of Byzantium supported in their texts that the founder of the city was Phaestos, son of Hercules or Ropalus. The city of Phaistos is associated with the mythical king of Crete Rhadamanthys. The new inhabitance began during the Geometric Age and continued to historical times (8th century BC onwards), up to the 3rd century, when the city was finally destroyed by neighboring Gortyn. Phaistos had its own currency and had created an alliance with other autonomous Cretan cities, and with the king of Pergamon Eumenes II. Around the end of the 3rd century BC, Phaestos was destroyed by the Gortynians and since then ceased to exist in the history of Crete. Scotia Aphrodite and goddess Leto (was called and Phytia also) worshiped there. People of Phaistos were distinguished for their funny adages. Phaistian in his descent was Epimenides who was the wise man who had been invited by the Athenians to clean the city from the Cylonian affair (Cyloneio agos) in the 6th century BC.