Early inhabitants called Kailua Oahu as their home as early as 1,500 years ago. They lived nearby a lagoon and gathered most of their livelihood from the sea. The sea also became their source of entertainment. Based on archaeological findings, as early as 500 AD, the soil in this area was not fertile enough, which made it unsuitable for agricultural purposes. This reason was mainly because of marshlands, which made it difficult to grow anything. These areas were known as Kawainui Marsh and Maunawili Valley. However, later on, as the landscape changed and the soil became fertile, they were able to grow sugarcane, taro, rice, watermelons, gourds, cucumbers and many other crops.
Kailua was home to royalty somewhere in the 16th century. It became home to Polynesians with a high status. Those who called it home were King Kakuhihewa, Kanekapu, Kahoowaha, Kauakahiakahoowaha and Kualii. It was here where menehune and mo’o came to life. Legend has it that the people of menehune or dwarf-like people in size worked and harvested in the marshlands during night time while the mo’o, lizard or dragon, helped by gathering fish.
The transformation of the land took place during World War II. Large hectares of land were sold by Kaneohe Ranch to the government. This reason was because of the government’s choice to develop the Navy base now known as Marine Corps Base Hawaii as well as Army’s Fort Hase. What was once called as agriculture lands used for growing crops and raising cattle later grew into an urban community. Later on, Kaneohe Ranch was also responsible for donating land intended for churches, schools and hospitals. This area is now known as Castle Junction. It started with simple structures like a tailor shop, butcher shop, barber shop, school and a pool house. One of the first subdivisions built was Coconut Grove. By the early 60s, additional structures expanded into a four-lane highway located in the Ko’olau Range, Liberty House (a small department store), bowling alley, telephone company, supermarket, Castle Hospital (now known as Castle Medical Center), and Craig’s Bakery. The population of Kailua rapidly grew from a mere 3,000 in the 1940s to 24,400 in the 1960s.