The origins are genuinely disputed by the ancient sources themselves. Diodorus Siculus has Sikels living on the mountain before the Chalcidian Greeks landed in the bay below and founded Naxos ; Strabo has the town founded by Naxians who fled up to Monte Tauro. The conventional date for Tauromenion is around 358 BC .

It was a real Greek city. Its street plan followed the grid principles associated with Hippodamus of Miletus — orthogonal streets parallel to two main axes, which are today's Corso Umberto (the ancient Via Consolare Valeria) and the Via Teatro Greco — and that plan is still legible in the walled town between the Torre dell'Orologio and Via San Pancrazio. Inscriptions from the site name its public administrators: the tamiai who managed the treasury, the hieromnamones who kept the sacred things, the agoranomoi who policed the market. A marble stele lists the gymnasiarchs .

The theatre on Monte Croce was built in the Hellenistic period, in the third century BC under Hieron II — Greek inscriptions on its seats resemble those at Syracuse — then almost entirely rebuilt at the end of the first century AD and enlarged in the first half of the second. It combines both traditions: a Greek cavea cut into the rock, a Roman scene building. Also Roman are the Odeon , imperial baths, and the Naumachie , a long brick terrace wall with eighteen great apsed niches supporting a cistern.

During the Servile War of 134–132 BC rebel slaves held the town. By Strabo's day it was a small place, lesser than Messina or Catania. After the Vandal siege the theatre was abandoned, and in the Middle Ages its scene building and stair towers were converted into a palace.

The medieval and early modern town left the buildings still standing on the Corso: the fourteenth-century Badia Vecchia , adapted from a Norman defensive tower; the thirteenth-century Palazzo dei Duchi di Santo Stefano ; Palazzo Ciampoli ; and the fifteenth-century Palazzo Corvaja , where in 1411 the first Sicilian Parliament assembled under Queen Bianca of Navarre , who used the building as a summer residence.

The modern town is a nineteenth-century creation of a different kind. Taormina became a fixed point of the Grand Tour, then a resident colony of foreign artists and writers — Robert Hawthorn Kitson's Casa Cuseni is the surviving monument of that world — and by the twentieth century a resort. The theatre, silent since antiquity, became a stage again from the 1950s.