People who spoke Austronesian languages first arrived in Sumatra around 500 BCE, as part of the Austronesian expansion from Taiwan to Southeast Asia. With its location in the India-China sea trade route, several trading towns flourished, especially in the eastern coast, and were influenced by Indian religions. One of the earliest known kingdoms was Kantoli, which flourished in the 5th century CE in southern Sumatra. Kantoli was replaced by the Empire ofSrivijaya and then later by the Kingdom of Samudra. Srivijaya was a Buddhist monarchy centred in what is now Palembang. Dominating the region through trade and conquest throughout the 7th to 9th centuries, the Empire helped spread the Malay culture throughout Sumatra, Malay Peninsula, and western Borneo. The empire was a thalassocracy, or maritime power that extended its influence from island to island. Palembang was a center for scholarly learning, and it was there the Chinese Buddhist pilgrim I Ching studied Sanskrit in 671 CE before departing for India. On his journey to China he spent four years in Palembang translating Buddhist texts and writing two manuscripts.

Srivijayan influence waned in the 11th century after it was defeated by the Chola Empire of southern India. Sumatra was then subject to conquests fromJavanese kingdoms, first Singhasari and subsequently Majapahit. At the same time Islam made its way to Sumatra through Arabs and Indian traders in the 6th and 7th centuries AD. By the late 13th century, the monarch of the Samudra kingdom had converted to Islam. Marco Polo visited the island in 1292 and Ibn Battuta visited twice during 1345–1346. Samudra was succeeded by the powerful Aceh Sultanate, which survived to the 20th century. With the coming of the Dutch, the many Sumatran princely states gradually fell under their control. Aceh, in the north, was the major obstacle, as the Dutch were involved in the long and costly Aceh War (1873–1903).

Sumatra came under the control of the Dutch East Indies and became a major producer of pepper, rubber, and oil. In the early and mid-twentieth century, Sumatran academics and leaders were important figures in Indonesia's independence movements. The Great Sumatran fault, a strike-slip fault, runs the entire length of the island along its west coast. On 26 December 2004, the western coast and islands of Sumatra, particularly Aceh province, were struck by atsunami following Indian Ocean earthquake. More than 170,000 Indonesians were killed, primarily in Aceh. Other recent earthquakes to strike Sumatra include the 2005 Sumatra Earthquake, and the October 2010 Sumatra earthquake.

The longest axis of the island runs approximately 1,790 km (1,110 mi) northwest–southeast, crossing the equator near the centre. At its widest point the island spans 435 km (270 mi). The interior of the island is dominated by two geographical regions: the Barisan Mountains in the west and swampy plains in the east.

To the southeast is Java, separated by the Sunda Strait. To the north is the Malay Peninsula, separated by the Strait of Malacca. To the east is Borneo, across the Karimata Strait. West of the island is the Indian Ocean.

The backbone of the island is the Barisan mountains chain, with the active volcano Mount Kerinci's 3,805 m (12,467 ft) the highest point, located at about the midpoint of the range. The volcanic activity of this region endowed the region with fertile land and beautiful sceneries, for instance around the Lake Toba. It also contains deposits of coal and gold. The volcanic activity stems from Sumatra being on the Pacific "Ring of Fire"—which is also the reason why Sumatra has had some of the most powerful earthquakes ever recorded: in 1833, 2004, 2005 and in the September 2007 Sumatra earthquakes.

To the east, big rivers carry silt from the mountain, forming the vast lowland interspersed by swamps. Even if mostly unsuitable for farming, the area is currently of great economic importance for Indonesia. It produces oil from both above and below the soil—palm oil and petroleum.

Sumatra is the largest producer of Indonesian coffee. Small-holders grow Arabica coffee (Coffea arabica) in the highlands, while Robusta (Coffea canephora) is found in the low lands. Arabica coffee from the regions of Gayo, Lintong and Sidikilang is typically processed using the Giling Basah (wet hulling) technique, which gives it a heavy body and low acidity.

Most of Sumatra used to be covered by tropical rainforest, but economic development coupled with corruption and illegal logging has severely threatened its existence. Even designated conservation areas have not been spared from this destruction.

The island is the world's 5th highest island, and the third highest in the Indonesian archipelago.