Ama was part of the ancient Oki Province, and the island consisted of a single district, also called Ama, and three villages. Emperor Go-Toba, defeated in the Jōkyū War in 1221, was exiled to the Oki Islands, and lived in Ama for 19 years until his death in 1198. Oki Shrine was built in 1939 to commemorate the 700th year of his death.
Ama came under the control of the Matsue Domain in the Edo period, and was divided into seven villages. After the Meiji restoration, the Oki Islands became part of Tottori Prefecture in 1871, but were transferred to Shimane Prefecture in 1881. Ama Village was established in 1904. Its population peaked in 1950 with 6,986 inhabitants, and has declined ever since. It was raised to town status on January 1, 1969.