Circa 1100 AD, the first Hilo inhabitants arrived, bringing with them Polynesian knowledge and traditions. Although archaeological evidence is scant, oral history has many references to people living in Hilo, along the Wailuku and Wailoa Rivers during the time of ancient Hawaii.

Originally, the name Hilo applied to a district encompassing much of the east coast of the Island of Hawaiʻi, now divided into the District of South Hilo and the District of North Hilo. When William Ellis visited in 1823, the main settlement in the Hilo district was Waiākea on the south shore of Hilo Bay. Missionaries came to the district in the early-to-middle 19th century, founding Haili Church, in the area of modern Hilo.

Hilo expanded as sugar plantations in the surrounding area created new jobs and drew in many workers from Asia, making the town a trading center.

A breakwater across Hilo Bay was begun in the first decade of the 20th century and completed in 1929. On April 1, 1946, a 7.8 magnitude earthquake near the Aleutian Islands created a fourteen-meter high tsunami that hit Hilo 4.9 hours later, killing 160 people. In response an early warning system, the Pacific Tsunami Warning Center, was established in 1949 to track these killer waves and provide warning. This tsunami also caused the end of the Hawaii Consolidated Railway, and instead the Hawaii Belt Road was built north of Hilo using some of the old railbed.

On May 23, 1960, another tsunami, caused by a 9.5 magnitude earthquake off the coast of Chile the previous day, claimed 61 lives allegedly due to people’s failure to heed warning sirens. Low-lying bayfront areas of the city on Waiākea peninsula and along the previously populated Hilo Bay were rededicated as parks and memorials.

Hilo expanded inland beginning in the 1960s. The downtown found a new role in the 1980s as the city’s cultural center with several galleries and museums being opened; the Palace Theatre was reopened in 1998 as an arthouse cinema.

Closure of the sugar plantations (including those in Hāmākua) during the 1990s led to a downturn in the local economy, coinciding with a general statewide slump. Hilo in recent years has seen commercial and population growth as the neighboring District of Puna became the fastest-growing region in the state.

Hilo is located on Hilo Bay on the eastern side of the island of Hawaii, 216 miles southeast of Honolulu (on the island of Oahu). The area's topography is mostly sloping, from the tops of the scenic Mauna Kea and Mauna Loa mountains to the sea.

Hilo is located less than 30 miles from Kilauea, one of the most active volcanoes on earth, which has been emitting lava since 1983. Much of the lava has reached the ocean, enlarging the island of Hawaii by about 500 acres.

Hilo is classified by the United States Census Bureau as a census-designated place (CDP), and has a total area of 58.4 square miles (151.3 km2), 54.3 square miles (140.6 km2) of which is land and 4.1 square miles (10.6 km2) of which (7.10%) is water.

Hilo features a tropical rainforest climate, with substantial rainfall throughout the course of the year. Hilo’s location on the eastern side of the island of Hawaiʻi, (windward relative to the trade winds), makes it the third wettest designated city in the United States behind the southeast Alaskan cities of Ketchikan and Yakutat and one of the wettest in the world.

An average of around 126.72 inches (3,220 mm) of rain fell at Hilo International Airport annually between 1981 and 2010, with 275 days of the year receiving some rain, which is the most rainy days for any place in the Northern Hemisphere and exceeded only in parts of Aisén and Magallanes in Chile. Rainfall in Hilo varies with altitude, with more rain at higher elevation. At some other weather stations in upper Hilo the annual rainfall is above 200 inches (5,100 mm).

Monthly mean temperatures range from 71.4 °F (21.9 °C) in January to 76.4 °F (24.7 °C) in August. The highest recorded temperature was 94 °F (34 °C) on May 20, 1996, and the lowest 53 °F (12 °C) on February 21, 1962. The wettest year was 1994 with 182.81 inches (4,643.4 mm) and the driest year was 1983 with 68.09 inches (1,729.5 mm). The most rainfall in one month was 50.82 inches (1,290.8 mm) in December 1954. The most rainfall in 24 hours was 27.24 inches (691.9 mm) on November 2, 2000./p>

Hilo’s location on the shore of the funnel-shaped Hilo Bay also makes it vulnerable to tsunamis.