Fantasy Island was founded by real estate developer Lawrence Grant, and was opened on July 1, 1961. It was designed by co-financier and local jeweler Gerald Birzon and constructed by Milton Milstein and Associates. The ownership group was formed under the name Fantasy Land, Inc. before changing soon after to Fantasy Island, Inc. The group had originally planned to call the park Fantasy Land, but changed the name for legal reasons after finding out there was already an area of Disneyland called Fantasyland.
Upon opening, the park occupied only 12 acres of land that was divided into five themed areas: Action Town, Animal Kingdom, Garden of Fables, Indian Village and Western Town. Action Town featured amusement rides, Animal Kingdom featured a petting zoo, Garden of Fables featured explorable recreations of fairy tale scenes, Indian Village featured Native American dancers, and Western Town featured a live Wild West show.
The park was expanded to 85 acres in 1974 to make room for adult rides and broaden the park’s appeal.
Citing the 1979 oil crisis and rising cost of gasoline, the park reported a 62% drop in profits during the 1979 season. The park was put up for sale that same year.