The lagoon has an area of 110 square kilometres. The deepest water in the lagoon is about 15 metres, but most of it is very shallow.
At some 900 miles (1,400 kilometres) distant, Tabuaeran is one of the closest landfalls to the Hawaiian Islands. The atoll was possibly used as a stopover by the Polynesians who first settled Hawaiʻi. Artifacts have been discovered that indicate possible early settlements by people from Polynesia—probably the Cook Islands or Tonga.
The first European to sight Tabuaeran was American captain Edmund Fanning of the American ship Betsy on June 11, 1798; it was named for him. At the time, the atoll was uninhabited and, like all of the Line Islands, had no truly native population. After Fanning, it was visited by whalers of several nationalities.
Before 1855, Captain Henry English and 150 labourers from Manihiki settled, and began producing coconut oil for export. He put the island under British protection, when it was visited by W.H. Morshead on HMS Dido on October 16, 1855.
Fanning was formally annexed to Great Britain by Captain William Wiseman of HMS Caroline on March 15, 1888. A deep opening was blasted, thereafter called the English Channel, on the west side of the atoll. Tabuaeran hosted a station on the Trans-Pacific Cable between Canada and Australia, a part of the All Red Line, beginning in 1902. Fanning Island Post Office opened on 29 November 1902. In September 1914 (World War I), the cable station was shelled by a German cruiser, the Nürnberg, and was slightly damaged. A landing force went ashore to complete the destruction. In 1939 the atoll was incorporated into the British colony of the Gilbert and Ellice Islands. In 1979, it gained independence, becoming part of the Republic of Kiribati (pronounced kee-ree-bahs).
Tabuaeran features in John Updike's short story "The Blessed Man of Boston, My Grandmother's Thimble, and Fanning Island."
An airfield was constructed on Napari (Napali) islet when the University of Hawaii operated a tide monitoring station on the atoll. That station closed in 1981 and the airfield is no longer in use.
Tabuaeran had a population of 2,539 at the 2005 Census, principally Gilbertese settlers brought from the main Kiribati archipelago by Fanning Island Plantations, Ltd., to work in the copra industry. The administrative centre of the atoll is Paelau, which is on the western side, south of a passage into the lagoon. The main health centre is located at Paelau. There are health clinics on Napari (Napali) islet on the north end of the island and at Kimarimari at the southern end of the island. At the 2010 Census the population had reduced to 1,960. The explanation for the reduction in population is that people left the island after the closure of Meleangi Tabai, the secondary school (which has since reopened); work opportunities were reduced by the Norwegian Cruise Line (NCL) ceasing to visit the island and as a result of the reduced operations of the Atoll Seaweed Company.
Reef fish and shellfish, babai (Cyrtosperma chamissonis), coconut, pigs, chickens, and seaweed (limu) grown in a lagoon are local foods, supplementing a main diet of imported rice and tinned meats.
The island's major exports are copra and hand crafts (including cowrie shell, shark tooth knives, and Kiribati stamps). A supply ship from Australia calls two or three times a year, as does the sailing vessel Kwai.
Helpful organizations with concerns for the local schools, churches and healthcare needs are Pacific CARE Missions and Pacific Island Aid.
Overfishing and pollution have impacted on the ocean surrounding the island. In the ocean surrounding uninhabited islands of the Northern Line Islands, Sharks comprised 74% of the top predator biomass (329 g m-2) at Kingman Reef and 57% at Palmyra Atoll (97 g m-2), whereas low shark numbers have been observed at Tabuaeran and Kiritimati.
Tabuaeran was a weekly port of call for Norwegian Cruise Line, who had ships based in Honolulu. Due to US federal regulations requiring foreign-flagged ships to call in a foreign port, the ships cruised to Tabuaeran. It was also more cost effective for the cruise line to visit a foreign country than to pay port charges as a consequence of the U.S. Passenger Vessel Services Act of 1886.
In 2007, the Norwegian Wind left Norwegian's fleet, and they introduced three cruise ships specifically to cruise in Hawaiʻi. These were all US-flagged ships, and thus were not required to visit foreign ports. The Pride of Hawaiʻi and Pride of America had seven-day sailings, and the Pride of Aloha took over the 10- and 11-day sailings that included Tabuaeran. In the fall of 2007, Norwegian announced that the Pride of Hawaiʻi would be reflagged and renamed the Norwegian Jade and sail in Europe. Due to this change, Norwegian announced that the Pride of Aloha and the Pride of America would sail seven-day cruises in Hawaiʻi and eliminate cruises to Tabuaeran. In the late spring of 2009, NCL decided to only have the Pride of America in Hawaii, and the Pride of Aloha was relocated. Fanning has been suffering since this decision.
Starting in January 2010, the Holland America cruise ship Rotterdam, September 2011 Westerdam, April 2011 Volendam and January and February 2012 Seaborne Cruiseline have been scheduling visits to Fanning. That is beginning to allow the island to regain some income with help from visiting cruise ships.