Providence Plantation was founded in 1636 by Roger Williams, a theologian, independent preacher, and linguist on land gifted by the Narragansett sachem Canonicus. Roger Williams, fleeing from religious persecution in the Massachusetts Bay Colony, agreed with his fellow settlers on an egalitarian constitution providing for majority rule "in civil things" and liberty of conscience. Roger Williams named the colony Providence Plantation, in recognition of agriculture as the basis of its economy and believing that God had brought him and his followers there. Williams named the other islands in the Narragansett Bay after virtues: Patience Island, Prudence Island and Hope Island.

In 1637, the Baptist leader Anne Hutchinson purchased land on Aquidneck Island from the Native Americans, settling in Pocasset, now known as Portsmouth, Rhode Island. With her came her husband, William Coddington and John Clarke, among others. Other neighboring settlements of refugees followed, which all formed a loose alliance. They sought recognition together as an English colony in 1643, in response to threats to their independence. The revolutionary Long Parliament in London granted a charter in March 1644. The colonists refused to have a governor, but set up an elected "president" and council.

The second of the plantation colonies on the mainland (following Anne Hutchinson’s 1638 colony of Portsmouth and the 1639 colony of Newport founded by Coddington and Clarke; both on Aquidneck or Rhode Island) was Samuel Gorton’s Shawomet Purchase of 1642 from the Narragansetts. As Gorton settled at Shawomet, the Massachusetts authorities laid claim to his territory and acted by force to enforce their claim. After considerable difficulties with the Massachusetts Bay General Court, Gorton traveled to London to enlist the sympathies of the Robert Rich, the Second Earl of Warwick, Lord Admiral and head of the Parliamentary Commission on Plantation Affairs (responsible for managing the overseas plantation colonies). Gorton returned to his colony in 1648 with a letter from Rich, ordering Massachusetts to cease molesting him and his people. In gratitude, Gorton renamed Shawomet Plantation to Warwick Plantation.

The separate plantation colonies in the Narragansett Bay region were very progressive for their time, passing laws abolishing witchcraft trials, imprisonment for debt, most capital punishment, and on March 18, 1652, chattel slavery of both blacks and whites. Most religious groups were welcomed, with only some restrictions on Catholicism.

In 1651, William Coddington obtained a separate charter from England setting up the so-called Coddington Commission, which made Coddington life governor of the islands of Rhode Island and Connecticut in a federation with Connecticut Colony and Massachusetts Bay Colony. Protest, open rebellion and a further petition to Oliver Cromwell in London, led in 1653 to the reinstatement of the original charter.

After the English revolutionary government was overturned in 1660, it was necessary to gain a Royal Charter from the new king, Charles II of England. Charles was then a Catholic sympathizer in staunchly-Protestant England, and approved the colony's promise of religious freedom. He granted the request in 1663, giving the Colony of Rhode Island and Providence Plantations an elected governor and legislature. In the following years many persecuted groups settled in the colony, notably Quakers and Jews.

Although Rhode Island remained at peace with the Native Americans, the relationship between the other New England colonies and the Native Americans was more strained, and sometimes led to bloodshed, despite attempts by the Rhode Island leadership to broker peace. During King Philip's War (1675–1676), both sides regularly violated Rhode Island's neutrality. The war's largest battle occurred in Rhode Island, when a force of Massachusetts, Connecticut and Plymouth militia under General Josiah Winslow invaded and destroyed the fortified Narragansett Indian village in the Great Swamp in southern Rhode Island, on December 19, 1675. The Narragansett also invaded, and burnt down several of the cities of Rhode Island, including Providence, although they allowed the population to leave first. Also in one of the final actions of the war, troops from Connecticut hunted down and killed "King Philip", as they called the Narragansett war-leader Metacom, on Rhode Island's territory.

The colony was amalgamated into the Dominion of New England in 1686, as James II of England attempted to enforce royal authority over the autonomous colonies in British North America. After the Glorious Revolution of 1688, the colony regained its independence under the Royal Charter. The bedrock of the economy continued to be agriculture, especially dairy farming, and fishing. Lumber and shipbuilding also became major industries. Slaves were introduced at this time, although there is no record of any law relegalizing slave-holding. Ironically, the colony later prospered under the slave trade, by distilling rum to sell in Africa as part of a profitable triangular trade in slaves and sugar with the Caribbean.
Rhode Island was the first of the thirteen colonies to renounce its allegiance to the British Crown, on May 4, 1776. It was also the last colony of the thirteen colonies to ratify the United States Constitution on May 29, 1790 once assurances that a Bill of Rights became part of the Constitution.