Thanks to the discovery of some archaeological finds from the Nuragic period, it can be attested that the area of San Teodoro was inhabited since the Neolithic period.
A document from the third century A.D. attests the existence of a small settlement in Roman times, called Coclearia. There is no absolute certainty, but in all likelihood this locality could have been located in the vicinity of the present-day town centre.
From the end of the Classical period and for the entire early medieval period, the history of the territory of San Teodoro is unknown. Most probably its name derives from its church, dedicated to a Roman soldier martyr from the fourth century AD. The first certain information dates back to the late Judicial period, when it was part of the Posada curatorate of the Giudicato of Gallura. The territory consisted of small settlements, called villas, that disappeared in later centuries. One of these was called Offolle, the first name that most probably evolved into Oviddè, its last news dates back to 1348. Later, most probably due to the plague, this community dispersed.
As far back as the 15th century, several travellers described the area as forested and semi-deserted, inhabited mostly by shepherds. Following the Aragonese conquest of the island in the 14th century, the territory was part of a fief that roughly comprised the present-day municipalities of Posada, Siniscola, Torpè, Lodè, Budoni and San Teodoro. This fief was known by various names, including County of Montalbo or Barony of Posada. San Teodoro d’Oviddè is the name by which it has been known since around 1700.
With the elimination of fiefs by the House of Savoy, the entire territory remained under the municipality of Posada. The area was populated by settlers of Tempiese origin, inhabitants with different cultural and linguistic origins than the population of the Baronies. The consequence was the inexorable desire for administrative detachment from the municipality of Posada, which only came about in 1959.
In the 1960s, thanks to the arrival of Prince Aga Khan in the nearby Costa Smeralda, San Teodoro underwent a great renewal with a notable expansion of its inhabited area: numerous tourist settlements, villas with gardens were built, and various tourist activities were born, following the momentum of the nearby Costa Smeralda.
Since then, the small Gallurese municipality has been one of the most popular destinations in Sardinia. It has a population of around 5,000 inhabitants and its economy is based on seaside tourism and its service activities related to the presence of numerous tourists.