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One of the most precious gifts of nature to Montenegro is peninsula Sveti Stefan. Legend says that Pastrovici, the local tribe, built on this peninsula a village, with captured Turk treasure, in the fifteenth century. Following the tradition, in this natural protected area was built a fort and one house for each Pastrovsko brotherhood, total of 12. The fort eventually was strengthened with towers and defensive walls with loopholes, and the village became bigger, and turned into a town and commercial and political center of Pastrovic.

In the ancient scriptures Sveti Stefan is known as the "place of justice" - the center of town and the tribe Pastrovic. The name comes from the fact that the court called "Bankada" held sessions in it for 400 years: usually in the Piazza - the area outside the city gates. The court held sessions on the site and resolved disputes until 1929. At Sveti Stefan there are three churches. The oldest one is a small church dedicated to St. Stefan, located on the most distant ridge of the peninsula. It was built in the 15th century and  the city was named by this church. In 1954 a group of architects and artists began renovating houses and worn with the Communist authorities moved the residents to the mainland and in 1957 transformed the fortress into one elite city-hotel with villas and apartments that combine the spirit of the past and present comfort, from which there is a magnificent views of the sea. The remaining residents who have been evicted from the island were the founders of today's modern settlements on land which is also called Sveti Stefan. At Sveti Stefan there are also rich cultural and historic heritage left behind by its original inhabitants. On the left and right sides of the sandy isthmus connecting the island with the shore there are two beautiful beaches of reddish color.
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