Many Jewish merchants and moneylenders visited and worked in the city beginning with the 10th century. In 1252, Jews were not allowed to settle in the main part of the city, so they settled on the island of Spinaulunga (also spelled Spinalonga) which later became Giudecca.
In 1290, Jewish merchants and moneylenders were allowed to work in Venice, but were forced to pay a special tax of five percent on all their import and export transactions.
The first Jews were allowed to settle in Venice only in 1385, when the city was involved in a war against neighboring Chioggia and needed loans from the Jewish money-lenders.
The Senate decided to expel the Jews from the city in 1394 due to fears of Jewish encroachment in certain economic spheres. They were allowed to work in the city for limited two-week intervals. Those who were not moneylenders were allowed to remain in the city, albeit with certain restrictions. Jews were forced to wear various markings on their clothing to identify themselves as Jews. In 1394 they had to wear a yellow badge, it was changed to a yellow hat in 1496 and to a red hat in 1500. Other anti-Jewish laws including the prohibition against owning land (enacted in 1423) and from building a synagogue (enacted in 1426). On occasion, Jews were forced to attend Christian services or become baptized. Anti-Jewish feelings were prevalent and three Jews died in a blood libel in 1480 and more died after another libel in 1506.
Since racism persisted, in 1516 Venice's ruling council confined all the Jews in a small area not far from today's train station, where there had been getti, or foundries. The gates were locked at night, and restrictions were placed on Jewish economic activities. Jews were only allowed to operate pawn shops and lend money, trade in textiles, and practice medicine. Despite these severe limitations, the Jewish community prospered in Venice, and they received better treatment there than in many other European cities at this time.
The Jews lived in the Ghetto through hard times - including the plague of 1630 - and better times, until Napoleon threw open the gates in 1797 and recognized equal rights to the Jews of Venice. At its height, around 1650, the Ghetto housed about 4,000 people in a space roughly equivalent to 2-1/2 city blocks. Before World War II there were still about 1,300 Jews in the Ghetto, but 289 were deported by the Nazis and only seven returned.