The current location of Chora was most likely determined by the Venetians when they ruled the island in the 16th century. But what is now a large, bustling capital was, until the mid-17th century, merely a castle (kastro) - which in those days consisted of a strong fortification surrounding a settlement - situated approximately where we can see the Paraportiani today. It was constructed by the Gisi family, who controlled the island after 1207.

Luxury was not a feature of early Chora. Living conditions in the so-called "castle" were cramped and there were hardly any streets to travel on. People and animals shared living space which meant sanitation was very poor. The citizens whitewashed their houses with lime to provide the minimum level of public hygiene.

Venetian rule in Mykonos was always threatened by the powerful Ottoman Empire, who had previously governed the island from 1537 (although no Turk ever stepped foot there) and during the period most of the old castle was destroyed. The Venetian-Ottoman wars (1645-1669 and 1684-1699) meant that Mykonos was left to decay: torn apart by pirates and plagued by poverty and epidemics. The castle itself was destroyed either by the pirate Karamameth in 1521, or by Barbarossa in 1537. In more recent years when prosperity returned to the island, the expansion of the town covered up any last remains. Next to what were the old castle gates still stands Mykonos' most famous church: the church of Panagia Paraportiani, meaning Mary by the Door.

This expansion probably began during the end of the 18th century when Mykonos was gradually developing into a significant naval force (they were very influential on the side of the Russians in the Russo-Turkish war of 1770-1774). During the Greek War of Independence (1821-1832), where the Greeks fought Ottoman tyranny, the island gained a large fleet and managed to stave off Turkish attackers in 1822. Mykonos' population also grew as the fighting on the mainland drove many migrants to its shores.

Chora grew outwards towards Barkia, which became the focal point of he expanding settlement, then to Limni, Matoyannia and Niohori (dialect for New Village). The shape the town eventually took was influenced by a thriving maritime trade industry and the subsequent rise in population. Unlike most Aegean island towns, which are built amphitheatrically, Chora is built like a horse-shoe and is entirely flat except for the 10 meter hill of Kastro and the elevated Kato Myloi. At the height of its prosperity (1750-1815) many captains built themselves two story houses (kapetaneika), which can be seen in the famous Mikri Venetia and other neighbourhoods. These became the most common form of residence ? with a door and a window on each floor, a skylight to ventilate the upper level, a little brightly painted balcony and an outdoor stone staircase ? and are now iconic features of the Mykonian landscape.