The first authenticated sighting of Deception Island was by the British sealers William Smith and Edward Bransfield from the brig Williams in January 1820; it was first visited and explored by the American sealer Nathaniel Palmer on the sloop Hero the following summer, on 15 November 1820. He remained for two days, exploring the central bay.
Palmer named it "Deception Island" on account of its outward deceptive appearance as a normal island, when Neptune's Bellows revealed it rather to be a ring around a flooded caldera.
Over the next few years, Deception became a focal point of the short-lived fur sealing industry in the South Shetlands; the industry had begun with a handful of ships in the 1819–20 summer season, rising to nearly a hundred in 1821–22. While the island did not have a large seal population, it was a perfect natural harbour, mostly free from ice and winds, and a convenient rendezvous point. It is likely that some men lived ashore in tents or shacks for short periods during the summer, though no archaeological or documentary evidence survives to confirm this. Massive overhunting meant that the fur seals became almost extinct in the South Shetlands within a few years, and the sealing industry collapsed as quickly as it had begun; by around 1825 Deception was again abandoned.
In 1829, the British Naval Expedition to the South Atlantic under the command of Captain Henry Foster in HMS Chanticleer stopped at Deception. The expedition conducted a topographic survey and scientific experiments, particularly pendulum and magnetic observations. A watercolour made by Lieutenant Kendall of the Chanticleer during the visit may be the first image made of the island. A subsequent visit by the American elephant-sealer Ohio in 1842 reported the first recorded volcanic activity, with the southern shore "in flames".
The second phase of human activity at Deception began in the early twentieth century. In 1904, an active whaling industry was established at South Georgia, taking advantage of new technology and an almost untouched population of whales to make rapid profits. It spread south into the South Shetland Islands, where the lack of shore-based infrastructure meant that the whales had to be towed to moored factory ships for processing; these needed a sheltered anchorage and a plentiful supply of fresh water, both of which could be found at Deception. In 1906, the Norwegian-Chilean whaling company Sociedad Ballenera de Magallanes started using Whalers Bay as a base for a single ship, the Gobernador Bories.
Other whalers followed, with several hundred men resident at Deception during the Antarctic summers and as many as thirteen ships operating in peak years. In 1908, the British government formally declared the island to be part of the Falkland Islands Dependencies and thus under British control, establishing postal services as well as appointing a magistrate and customs officer for the island. The magistrate would ensure that whaling companies were paying appropriate licence fees to the Falklands government as well as ensuring that catch quotas were adhered to. A cemetery was built in 1908, a radio station in 1912, a hand operated railway also in 1912, and a small permanent magistrate's house in 1914. The cemetery, by far the largest in Antarctica, held graves for 35 men along with a memorial to 10 more presumed drowned. These were not the only constructions; as the factory ships of the period were only able to strip the blubber from whales and could not use the carcasses, a permanent on-shore station was established by the Norwegian company Hvalfangerselskabet Hektor A/S in 1912 – it was estimated that up to 40% of the available oil was being wasted by the ship-based system. This was the only successful shore-based industry ever to operate in Antarctica, reaping high profits in its first years. A number of exploring expeditions visited Deception during these years, including the Wilkins-Hearst expedition of 1928, when a Lockheed Vega was flown from a beach airstrip on the first successful flights in Antarctica.
The development of pelagic whaling in the 1920s, where factory ships fitted with a slipway could tow aboard entire whales for processing, meant that whaling companies were no longer tied to sheltered anchorages. A boom in pelagic Antarctic whaling followed, with companies now free to ignore quotas and escape the costs of licences. This rapidly led to overproduction of oil and a collapse in the market, and the less profitable and more heavily regulated shore-based companies had trouble competing. In early 1931, the Hektor factory finally ceased operation, ending commercial whaling at the island entirely.
Deception remained uninhabited for a decade but was revisited in 1941 by the British auxiliary warship HMS Queen of Bermuda, which destroyed the oil tanks and some remaining supplies in order to ensure it could not be used as a German supply base. In 1942, an Argentinean party aboard the Primero de Mayo visited and left signs and painted flags declaring the site Argentinean territory; the following year, a British party with HMS Carnarvon Castle returned to remove the signs. The island was finally reoccupied in early 1944 by a party of men from Operation Tabarin, a British expedition, who established a permanent scientific station. This was occupied until 5 December 1967, when an eruption forced a temporary withdrawal. It was used again between 4 December 1968 and 23 February 1969, when further volcanic activity caused it to be abandoned.
In 1955, Chile inaugurated its station Pedro Aguirre Cerda at Pendulum Cove, with a refuge site at Gutierrez Vargas (es), to increase the Chilean presence in the sector claimed by that nation. The same year, the Falkland Islands and Dependencies Aerial Survey Expedition was established at Deception to help survey the Antarctic Peninsula, operating aircraft from Hunting Aerosurveys Ltd.
In 1961, Argentina's president Arturo Frondizi visited the island to show his country's interest. Regular visits were made by other countries operating in the Antarctic, including the 1964 visit of the US Coast Guard icebreaker Eastwind, which ran aground inside the harbour.
However, the volcano returned to activity in the late 1960s, destroying the existing scientific stations. Both British and Chilean stations were demolished, and the island was abandoned for several years. The final major eruption was reported by the Russian Bellingshausen station on King George Island and the Chilean station Arturo Pratt on Greenwich Island; both stations experienced major falls of ash on 13 August 1970.
In 2000, there were two summer-only scientific stations, the Spanish Gabriel de Castilla Base and the Argentinian Decepción Station.
Remains of previous structures at Whalers Bay include rusting boilers and tanks, an aircraft hangar and the British scientific station house (Biscoe House), with the middle torn out by the 1969 mudflows. A bright-orange derelict airplane fuselage, which is that of a de Havilland Canada DHC-3 Otter that belonged to the Royal Air Force, was recovered in 2004. There are plans to restore the airplane and return it to the island.
The Russian cruise ship MV Lyubov Orlova ran aground at Deception Island on 27 November 2006. She was towed off by the Spanish Navy icebreaker, Las Palmas and later became a ghost ship in the North Atlantic.
The island is approximately circular with a diameter of about 12 km (7.5 mi). A peak on the east side of the island, Mount Pond, has an elevation of 542 m (1,778 ft), and over half the island is covered by glaciers. The centre of the island is a caldera formed in a huge (VEI-6) eruption which has been flooded by the sea to form a large bay, now called Port Foster, about 9 km (5.6 mi) long and 6 km (3.7 mi) wide. The bay has a narrow entrance, just 230 m (755 ft) wide, called Neptune's Bellows. Adding to the hazard is Ravn Rock, which lies 2.5 m (8.2 ft) below the water in the middle of the channel. Just inside Neptune's Bellows lies the cove Whalers Bay, which is bordered by a large black sand beach.
Several maars line the inside rim of the caldera, with some containing crater lakes (including one named Crater Lake). Others form bays within the harbour, such as the 1 km (0.6 mi) wide Whalers Bay. Other features of the island include Mount Achala, Primero de Mayo Bay, Sewing-Machine Needles, Telefon Bay and Telefon Ridge.
A 2016 study on Ardley Island, 120km to the northeast, examined lake guano sediments and studied penguin population dynamics over 7,000 years. Three of five population growth phases were terminated by a sudden crash, due to volcanic eruptions from the active volcano of Deception Island.
Deception Island has become a popular tourist stop in Antarctica because of its several colonies of chinstrap penguins, as well as the novel possibility of making a warm bath by digging into the sands of the beach. Mount Flora is the first site in Antarctica where fossilized plants were discovered.
After the Norwegian Coastal Cruise Liner MS Nordkapp ran aground off the coast of Deception Island on 30 January 2007, fuel from the ship washed into a bay. Ecological damage has not yet been determined. On 4 February 2007 the Spanish Gabriel de Castilla research station on Deception Island reported that water and sand tests were clean and that they had not found signs of the oil, estimated as 500 to 750 litres (130 to 200 US gallons; 110 to 160 imperial gallons) of light diesel.
Deception Island exhibits some wildly varying microclimates. Some water temperatures reach 70 °C (158 °F). Near volcanic areas, the air can be as hot as 40 °C (104 °F).
Some 11 terrestrial sites have been collectively designated an Antarctic Specially Protected Area (ASPA 140), primarily for their botanic and ecological values, because the island has the greatest number of rare plant species of any place in the Antarctic. This is largely due to frequent volcanic activity creating new substrates for plant colonisation:
In addition, two marine sites in Port Foster have collectively been designated Antarctic Specially Protected Area 145, to protect their benthic communities.
Baily Head, a prominent headland forming the easternmost extremity of the island, has been identified as an Important Bird Area (IBA) by BirdLife International because it supports a very large breeding colony of chinstrap penguins (100,000 pairs). The 78 ha IBA comprises the ice-free headland and about 800 m of beach on either side of it. Other birds known to nest at the site include brown skuas, Cape petrels and snowy sheathbills.