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When the tsunami hit, two-thirds of the capital city Malé was flooded during the early hours of the day. Outlying low-level atolls were badly affected and some low lying islands, including some of the major resorts, were completely submerged during the high tide.

On 26 December 2004 the Maldives were devastated by a tsunami following the 2004 Indian Ocean earthquake. The Maldives' shallow coastal waters reduced the destructive impact, preventing the waves from reaching much more than 1.2 - 1.5 meters in height. Despite this, the archipelago's low lying nature (one of the lowest lying countries on Earth) meant that nearly all of the country was swamped.

The greatest challenge facing the republic in the early 1990s was the need for rapid economic development and modernization, given the country's limited resource base in fishing and tourism. Concern was also evident over a projected long-term rise in sea level, which would prove disastrous to the low-lying coral islands. Fortunately in the early 2000s it was found sea level had fallen during preceding decades.

During the British era from 1887 to 1965, Maldives continued to be ruled under a succession of sultans. The sultans were hereditary until 1932 when an attempt was made to make the sultanate elective, thereby limiting the absolute powers of sultans. At that time, a constitution was introduced for the first time, although the sultanate was retained for an additional twenty-one years.

Muhammad Thakurufaanu, left the Maldive Islands with his brothers Ali and Hasan to Minicoy Island off the coast of India in the Laccadive Archipelago. The three Utheemu brothers built the greatest Maldivian ship ever crafted- the Kalhuoffummi and got Dandehelu to captain the ship.

Western interest in the archaeological remains of early cultures on Maldives began with the work of H.C.P. Bell, a British commissioner of the Ceylon Civil Service. Bell was shipwrecked on the islands in 1879, and he returned several times to investigate ancient Buddhist ruins. Historians have established that by the fourth century A.D.

In 1978 Maldives joined the International Monetary Fund and the World Bank. Tourism also gained in importance to the local economy, reaching more than 120,000 visitors in 1985. The local populace appeared to benefit from increased tourism and the corresponding increase in foreign contacts involving various development projects.

Heyerdahl's research indicates that as early as 2,000 B.C. Maldives lay on the maritime trading routes of early Egyptian, Mesopotamian, and Indus Valley civilizations. Heyerdahl believes that early sun-worshipping seafarers, called the Redin, first settled on the islands.

Despite coup attempts in 1980, 1983, and 1988, Maumoon Abdul Gayoom's popularity remained strong, allowing him to win three more presidential terms. In the 1983, 1988, and 1993 elections, Gayoom received more than 95 percent of the vote. Although the government did not allow any legal opposition, Gayoom was opposed in the early 1990s by Islamists (also seen as fundamentalists) who wanted to impose a more traditional way of life and by some powerful local business leaders.