The village was situated on a sandstone hill that overlooked the Mediterranean. It was bordered by coastal agricultural lands to the east and by large evaporation pans (used for extracting salt from sea water) to the southwest. Three km southeast of the village, in Wadi al-Mughara, evidence of early human habitation was discovered in the caves of al-Wad, al-Tabun, and al-Sukhul during an excavation in the 1930s. About 3 km northeast, at the entrance to Wadi Falah, evidence of a human presence during the Neolithic period was unearthed in a cave. Excavations close to the east revealed a site that had been occupied from the second millennium B.C. to the seventh century A.D. In a Hellenistic source the site is named Adarus, a colony of Sidon.
The Arab geographer Yaqut al-Hamawi (d. 1228) referred to the village in his Mu'jam al-Buldan, describing it as a fortress called al-Ahmar ('red'). In 1218 the Crusaders built a town and a large fortress on the site of Adarus. They called the fortress Castellum Peregrinorum, 'castle of the pilgrims.' 'Atlit remained in the Crusaders' hands until 1291, when its defenders abandoned it in the wake of the general withdrawal of their forces from the coastal area of Palestine. In 1296 descendants of the 'Uwayrat tribe (a Tartar tribe) settled in 'Atlit and its vicinity. In 1596 'Atlit had a farm that paid taxes to the Ottoman government. In the early nineteenth century the British traveler Buckingham saw the ruins of the village from a distance. Later in that century, another traveler (Thomson) said that the village of 'Atlit was built inside the ruins of the Crusader village. The authors of the Survey of Western Palestine said it was a hamlet built of adobe bricks. Its inhabitants, who numbered about 200, tilled 20 faddans (1 faddan = 100-250 dunums; see Glossary).
In 1903 Jewish settlers established a settlement near 'Atlit and gave it the same name. During World War I the Jewish settlement became a center for Nili (Netzach Yisra'el Lo Yeshaqqer, 'the strength of Israel will not lie'), a pro-British, Zionist intelligence organization. In the 1920s the Palestinian village of 'Atlit was a member of a regional cooperative association that was dedicated to the improvement of peasant life and included some 25 villages in Haifa District. By 1938 the population in both the village and the settlement of 'Atlit had grown to 732, comprised of 508 Arabs and 224 Jews. By 1944/45, however, the number of Arab inhabitants had fallen to 150, including 90 Muslims and 60 Christians. As for the land, only 15 dunums remained in Arab hands; 3 dunums were planted in cereals and 11 dunums were irrigated or used for orchards. The village had a railway station. In the 1930s C. N. Johns excavated the Crusader town and fortress for the Department of Antiquities in Palestine. More recent exploration has shown that the north harbor of the town may be Hellenistic in origin. A Muslim cemetery east of the Crusader castle has an Arabic inscription dating to 1800.
The History of the Haganah refers to 'Atlit as a base of Haganah activity and a source for recruits, who lived in the Jewish settlement there. Another Israeli source (historian Benny Morris) fails to list it among the villages captured and depopulated during 1948. It is not clear when the Arab village of 'Atlit fell into Zionist hands or by what means.
The Zionists established the settlement of 'Atlit (145232) in 1903 and Newe Yam (143231) in 1939. Both are now on village lands.
No traces of Arab houses are left. A railroad station that used to serve the village is still in use. A prison in the vicinity was used by Israel in 1989 for holding Lebanese and Palestinian detainees.