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The Castle of San Sebastián is located on a small island which, according to the classical tradition, in ancient times already housed the Phoenician temple of Moloch (ancient Canaanite deity, to which human victims were sacrificed in the valley of Hinnom) and Kronos (the youngest of the 12 Titans of Greek mythology, as well as the father of Zeus).

It owes its name to a hermitage built in 1457 by the crew of a Venetian ship, after having obtained the authorization to stop in this place as a lazzaretto (hospital) to treat the plague that had struck them. In fact, San Sebastiano was often invoked as protector of the plague victims and against the plague, of which we also find homage in Venice with the Church of San Sebastiano, in Dorsoduro.

To build the hermitage, the Venetians used the remains of an old lighthouse, which was then replaced in 1613 by a watchtower which, in addition to serving as a guide for sailors, had defensive functions. The lighthouse was rebuilt in the 18th century and in 1908 it was replaced by the current structure. To strengthen the defense of this site, a castle was built in 1706, the walls of which formed a nine-sided polygon with two incoming corners and the rest protruding. In the northwest corner was a lighthouse tower and the San Sebastián hermitage. The whole island was protected by a parapet with gunboats around its perimeter and a water moat with two drawbridges, except on the southern front naturally defended by the cliff, which was deemed sufficient for the purpose. Before the moat there was a parade ground that defended the entire territory of the island.

In 1736 the castle was equipped with 17 cannons, which made it possible to control the entrance to La Caleta and the southern area. However, it was only in 1860 that the current pier was built that connects the castle with the mainland, at the port of La Caleta. Originally, in fact, access by land was only possible at low tide (which even today creates a considerable dry). The interior houses a 30-meter high lighthouse, designed in 1907 by Rafael de la Cerda, which became the second electric lighthouse in Spain at the time.

In 2009, on the occasion of the bicentenary of Cortes de Cadiz in 2012, a series of buildings were rehabilitated to be the site of the celebrations. The complex of buildings consists mainly of two complexes: Castello de San Sebastián and Avanzada de Santa Isabel, which are located on two different islands. The restorations mainly consisted in restoring the fortified complex to its original state, removing those elements that "undermined" its most genuine image.

The castle also houses the Marine Research Laboratory (LABIMAR), the CEI-MAR (Campus of International Sea Excellence) and the University of Cadiz.