The history of the city of Chania goes back to the Neolithic period, as indicated by the archeological findings (3^rd-2^nd millennium B.C).
The ceramics found on the hill of Kasteli, east from the port, is the earliest testimony of human presence and activity. The geographical location of the prehistoric settlement was ideal, not only because it was next to the sea, but also because it was surrounded by the rich valley of Chania. Thus, the location encompassed all the requirements for the development of agriculture, fishery and sea commerce.

Since its early years, the settlement developed to an important commercial center and achieved strong commercial relations with the island of Kythira. In about 2.200 B.C, the area south from the Municipal Market of Chania was inhabited. In 1450 B.C, the settlement of Kasteli was destroyed by a big fire. About one hundred clay inscriptions with Minoan Linear A symbols were found burned by the fire, which indicate the existence of a Minoan palace in the area. After the 1450 B.C destruction, the city was rebuilt and flourished until the end of the Minoan period, in about 1100 B.C.

The post-Minoan ΙΙΙ period (1400 - 1100 B.C) was also a time of flourishment for the settlement. The necropolis of the prehistoric settlement was extending to a large distance around it.  Numerous post-Minoan tombs (1400 - 1200 B.C) have been discovered on the east, southeast and northeast part of the modern city of Chania, where numerous vessels bearing post-Minoan inscriptions have also been found.

It is certain the city of Chania, including Kasteli, the old and the new part of the city, was inhabited during the first centuries of the first millennium (the geometric and archaic period). There are only few remains that date back to the classic period (5^th and 4^th century B.C). However, the settlement probably flourished during this period, as indicated by the tombs found in excavations and according to the testimonies of ancient writers. It is known that the great sculptor Krisilas, student of Feidias, originated from Kydonia of the classic years. Although Kydonia was attacked many times by its enemies and during the civil wars between Cretan cities, it managed to maintain its integrity and glory for many centuries.