Located in the north section of the harbour of Aghios Nicolaos, the prehistoric settlement of Aghia Eirene was one of the most important cultural centres of the Aegean. The site was first occupied in the Late Neolithic period (3000 B.C.) and continued to be inhabited until the 15th century B.C., when it was destroyed by a series of earthquakes, in the period of its heyday. Restricted occupation of the site is attested in the Classical and Roman periods.

Multi-roomed buildings with well-built wall masonry are preserved of the Early Cycladic settlement (2500-2000 B.C.); the fortification and the sanctuary have survived of the Middle Cycladic settlement (2000-1600 B.C.), while the pottery evidence points to the conclusion that intensive commercial activity took place on the site. During the Late Bronze Age (1600-1450 B.C.) the settlement presented political and economic flourishing, comparable to all the known Mycenaean centres but indicating a strong Minoan influence.

The systematic excavation of the site by the American School of Classical Studies was begun in 1960 under the direction of Prof. J. L. Caskey of the University of Cincinnati and continued until 1980. The excavation has not been completed in the north part of the promontory.