The first tourists officially arrived in Rio on January 1, 1502. They were part of a Portuguese exploratory voyage headed by Amerigo Vespucci. He entered what he thought to be the mouth of a river, hence the name Rio de Janeiro or River of January. Vespucci´s river was in reality a 380-sq km (147-sq mile) bay, still known by its indian name, Guanabara or “arm of the sea.” However geological discoveries indicate that people lived along the length of the Rio de Janeiro seaboard thousands of years ago.

Evidence of sambaquis (huge shell mounds left by the coastal inhabitants who lived on shellfish collected from the water's edge) suggests that settled coastal communities lived here 5,000 years ago. When the Europeans arrived in the region, the indigenous inhabitants belonged to the Tupi or TupiGuarani, Puri, Botocudos and Maxacali linguistic groups. No Indian people in what is now Rio de Janeiro state survived the European incursions.

When the Portuguese settled their colony in the 1500's they sought to leave the Indians in peace, however it was eventually broken by raids launched by French and Portuguese pirates who prowled the Brazilian coast in search of riches. As in the rest of Brazil, great efforts were put into enslaving the Indians to work plantations and converting them to Christianity. Gradually, routes up and down the coast were made to connect the far-flung outposts.

The history of the state was associated with the development of, and settlement along the roads. In the 16th century, the first established road linked Paraty with the valley of the Rio Paraíba, continuing into southern Minas Gerais. This became a route for exporting gold in the 18th century and it was followed by the Caminho Novo, also from Minas Gerais, which ended on the shores of the Baía de Guanabara.

By the time Brazilian independence had been declared in 1822, the gold mines had been exhausted and had given way to another treasure: coffee. The first coffee plantations were established in the old province of Rio de Janeiro, expanding throughout the nineteenth century as far as the Paraíba Valley in the state of São Paulo and other parts of Brazil. The crop was taken by mule train to new ports on the Baías de Guanabara, Sepetiba and Ilha Grande and these roads were the main means of communication until the coming of the railways after 1855. With the rail terminus, first from Petrópolis, then from São Paulo and Minas Gerais, Rio de Janeiro acquired a trading dominance, which added to its political importance within Brazil.

Until 1960, the state which is now Rio de Janeiro was called the Estado de Guanabara, with its capital at Niteroi. The city of Rio, as capital of Brazil, was a federal district in its own right. After Brasília had been made the capital of the country in 1960, the states of Guanabara and Rio de Janeiro were amalgamated into the new Estado do Rio de Janeiro with its capital at Rio.

The joining together of the old capital and the state of Rio de Janeiro has created a significant economic force. The new state has become Brazil's largest producer of petroleum, which is pumped from the Campos platform. This oil-field was discovered in 1974 and using Brazilian-made deep-water exploration technology, production from the Campos basin has reached the level of 52,600 m3 (330,000 barrels) a day, accounting for 70% of Brazil's total petroleum output. During the early decades of the twentieth century, agriculture in the state of Rio de Janeiro went into decline and was no longer a force in the state's economy.

The phenomenon of agricultural modernization, bringing about major transformations within the sector throughout Brazil from the 1970's onwards, scarcely touched mainland Rio de Janeiro. Sugarcane is the state's main crop, grown in the municipality of Campos dos Goitacazes. The state's economy basically revolves around its industrial park and tourism. Of particular significance are the industries concerned with metallurgy, steel, chemicals, foodstuffs, mechanics, publishing and graphics, paper and cellulose, mineral extraction and petroleum derivatives. The state's GDP accounts for 12.5% of the national GDP.

For many decades Rio de Janeiro was the second busiest and most important seaport in Brazil, a position it is set to recover with the construction of a modern port complex located in Sepetiba Bay. The state was the cradle of Brazil's national steel industry with the founding in the 1940s of the state-owned Companhia Siderúrgica Nacional, now privatized. The first car production plant, the Fábrica Nacional de Motores (FNM) was set up in the state of Rio but is now closed. Ninety five per cent of the Brazilian shipbuilding industry is based in the state with the presence of the major national shipyards; this sector has been through a long period of stagnation and nowadays depends on major investment in order to make a recovery.

After going through a period of economic stagnation, the setting up of a Volkswagen plant in Resende has clearly signaled the rebirth of the state's economy. The commercial vehicles factory has become the most visible symbol that Rio is again one of the most promising states on track for the international investment that is once again heading for Brazil.