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Newport is situated slightly to the north of the centre of the Island, at the head of the navigable section of the River Medina, which flows northward to Cowes and the Solent, and on which the town has a quay.

Mousterian remains, featuring tools made by Neanderthals at least 40,000 years ago, were found at Great Pan Farm in the 1970s.

There are signs of Roman settlement in the area, which was probably known as Medina, including two known Roman villas, one of which, Newport Roman Villa, has been excavated and is open to the public.

Information about the area resumes after the Norman Conquest. The first charter was granted in the late 12th century. In 1377 an invading French force burnt down much of the town while attempting to take Carisbrooke Castle, then under the command of Sir Hugh Tyrill. A group of Frenchmen were captured and killed, then buried in a tumulus later nicknamed Noddies Hill, a "noddy" being medieval slang for a body. This was later corrupted to Nodehill, the present-day name for a part of central Newport - a name confusing to many as the area is flat.

In 1648 Charles I and a group of Parliamentary Commissioners concluded the Treaty of Newport, an attempt at reaching a compromise in the Civil War, undermined by Charles's negotiations with the French and Scots to intervene on his behalf. The Treaty was repudiated by Oliver Cromwell upon returning from defeating the Scots at the Battle of Preston. This led to Charles's execution.

The town had been incorporated as a borough in 1608. The town's position as an area of trade accessible to the sea meant it rapidly took over from nearby Carisbrooke as the main central settlement, eventually absorbing the latter as a suburb. The borough ceased to exist in 1974 when it was incorporated into the larger Borough of Medina, which was itself superseded in 1995 by a single unitary authority covering the whole of the Isle of Wight.

Newport since the 1960s has acquired new shopping facilities, a pedestrianised central square, and through road traffic redirected off many of the narrow streets. Newport Quay has been redeveloped with art galleries such as the Quay Arts Centre and new flats converted from old warehouses.

The Queen Victoria Memorial was designed by local architect Percy Stone (1856-1934).

The town's suburb of Parkhurst is home to two prisons: the notorious Parkhurst Prison and Albany; together they make up HMP Isle of Wight, the largest prison in the UK. Parkhurst and Albany were once among the few top-security prisons in the United Kingdom. Camp Hill was another prison in the area but closed in 2013.

Carisbrooke Castle is located south-west of the town centre.

In 2007, English Heritage opened a holiday flat inside the castle, in converted former staff quarters. The flat is above the museum near the room in which the king was kept captive. A balcony going across the King's prison room adjoins the flat, which is currently rented on a long lease to English Heritage staff. According to the Association of Leading Visitor Attractions, nearly 120,000 people visited Carisbrooke Castle in 2010.

Carisbrooke was the strongest castle on the Island; though it is visible from some distance, it does not dominate the countryside like many other castles.

There are traces of a Roman fort underneath the later buildings. Seventy-one steps lead up to the keep; the reward is a fine view. In the centre of the castle enclosure are the domestic buildings; these are mostly of the 13th century, with upper parts of the 16th century. Some are in ruins, but the main rooms were used as the official residence of the Governor of the Isle of Wight until the 1940s, and they remain in good repair.

The Great Hall, Great Chamber and several smaller rooms are open to the public, and an upper room houses the Isle of Wight Museum. Most rooms are partly furnished.

One of the main subjects of the museum is King Charles I. He tried to escape from the castle in 1648, but was unable to get through the bars of his window.

The name of the castle is echoed in a very different structure on the other side of the world. A visit to the castle by James Macandrew, one of the founders of the New Zealand city of Dunedin, led to him naming his estate "Carisbrook". The name of the estate was later used for Dunedin's main sporting venue.