For nearly three hundred years Alagoas was not a place in its own right — it was the southern end of the Captaincy of Pernambuco, opened up because the sugar economy on the coast needed new ground to plant. The settlements that anchored that push, Porto Calvo and Penedo and the town then called Alagoas and now Marechal Deodoro, ran the region's economic and social life for generations. Autonomy came only in 1817. The state's coat of arms still shows Porto Calvo, along with the sugarcane and cotton that paid for everything, and the name itself is simply the plural of lagoa: the lagoons behind the coast, Mundaú and Manguaba, on whose margins Maceió grew up around the port of Jaraguá.

The Dutch invasion of Pernambuco reached Alagoas in 1631 and lasted until 1645, when hard fighting at Porto Calvo drove the invaders out and left the local economy wrecked. The war had another consequence the planters had not planned for. In the confusion, large numbers of enslaved Africans walked away from the plantations and into the interior, and the labour shortage that followed was severe. Those who left gathered in communities the colonists later called quilombos. The largest of them, Palmares, governed itself in the hills above what is now União dos Palmares and was only broken at the very end of the seventeenth century, after Zumbi was killed in November 1695. Maceió's international airport carries his name.

At the start of the twentieth century a Pernambucan entrepreneur named Delmiro Gouveia tried something almost nobody in the sertão had attempted: industry, powered by the São Francisco. His Estrela thread factory came to turn out more than 500,000 spools a day in the dry interior. In October 1917 he was shot dead, in circumstances that were never satisfactorily explained, after what was widely rumoured to be pressure from foreign competitors who wanted the factory sold. His machinery was destroyed afterwards and thrown into the Paulo Afonso falls. The town that grew around the works now carries his name, and the story is told in Alagoas as a parable about what happens to people who try to build something in the backlands.

Alagoas holds about 1.6 percent of Brazil's people — 3,127,683 at the 2022 census, across 102 municipalities — and produces around 0.8 percent of its GDP. It remains one of the country's poorest states, ranking twenty-sixth of twenty-seven on the human development index, though the indicators have been improving. Sugar and alcohol still dominate exports at roughly 59 and 29 percent, with chemicals and Arapiraca's tobacco behind them, and the state is a major producer of coconuts and natural gas. The other economy is the coastline: fringing reefs, warm shallow water, and beaches around Maragogi and Japaratinga that turned a sleepy stretch of coconut palms into resort country within a couple of decades.

For a small, poor state Alagoas has an outsized cultural export record. Graciliano Ramos, whose novels remain the hardest and clearest writing anyone has done about the Northeast, came from here, and so did the poets Jorge de Lima and Lêdo Ivo, and Aurélio Buarque de Holanda, whose dictionary Brazilians still call simply the Aurélio. The musicians Djavan and Hermeto Pascoal are Alagoanos; so is the football coach Zagallo, and the anthropologist Arthur Ramos, and the jurist Pontes de Miranda. The list runs long enough that it has become part of how the state understands itself: not much land, not much money, and a persistent habit of producing people the rest of the country has to reckon with.