The name "Inchmahome" comes from the Gaelic Innis MoCholmaig, meaning Island of St Colmaig.
The priory was founded in 1238 by the Earl of Menteith, Walter Comyn, for a small community of the Augustinian order (the Black Canons). The Comyn family were one of the most powerful in Scotland at the time, and had an imposing country house on Inch Talla, one of the other islands on the Lake of Menteith. There is some evidence that there was a church on the island before the priory was established.
The priory has a long history of receiving many notable guests. King Robert the Bruce visited three times: in 1306, 1308 and 1310. His visits were likely politically motivated, as the first prior had sworn allegiance to Edward I, the English king. In 1358 the future King Robert II also stayed at the priory. In 1547 the priory served as a refuge for Queen Mary, aged four, hidden here for a few weeks following the disastrous defeat of the Scots army at the Battle of Pinkie Cleugh during the Rough Wooing.
The decline of the monastic orders in the 16th century was hastened by the fact that the heads of abbeys and priories became appointees of the local landowner, who often did not share the religious goals of the monks or ordained priests. In 1547, the office passed to John, Lord Erskine, who later became head of Cambuskenneth and Dryburgh abbeys. The Scottish Reformation meant that there were no new priests being ordained, and religious land and buildings gradually passed into secular hands, leading to the priory's inevitable decline. In 1606 the land and property passed to the Erskine family, and later to the Marquess of Montrose; the 6th Duke of Montrose passed it into the care of the State in 1926.
The author, socialist and nationalist politician Robert Bontine Cunninghame Graham and his wife Gabriela Cunninghame Graham are buried in the ruined chancel of the priory, where there is also a stone commemorating his nephew, and heir, Admiral A.E.M.B. Cunninghame Graham.
Although most of the buildings are now ruins, much of the original 13th-century structure remains, and it is now in the care of Historic Environment Scotland, who maintain and preserve it as a scheduled ancient monument.
The priory can be visited by boat, operated by Historic Scotland from the nearby pier at Port of Menteith, from March to September.