Oecussi-Ambeno, two original kingdoms which existed before the the Portuguese arrived, was the first part of the island of Timor on which the Portuguese settled: in 1556 Dominican brothers established the village of Lifau, five kilometres west of present day Pante Macassar (or Pante Makasar), now the main town of the district.
Lifau became the capital of Portuguese Timor in 1702, but the mestizo Topasses rebelled and drove the Portuguese out; they returned but then withdrew to Dili in 1767 because of attacks by the Dutch, who were in the process of establishing their authority over Indonesia. The Portuguese later recaptured Pante Macassar and built a fort there. In 1859 a Treaty was signed in Lisbon in which the Netherlands and Portugal divided Timor between them. This left Oecussi-Ambeno as an enclave in Dutch territory; its definite border was drawn in 1916.
The enclave was virtually forgotten after this. It only became the Municipality of Oecussi in 1973. There was a Portuguese fort and a port at Pante Macassar and it was here that on 29 November 1975 an Indonesian advance force took control, a week before East Timor proper was invaded. FRETILIN was not active in Oecussi and there was no resistance when the enclave was annexed by Indonesia. However, after the independence referendum in 1999, it was subjected to terrible violence by Indonesian militias, in which over 90% of infrastructure was destroyed. On 8 September a group of young men was killed by Sakunar militia men, with support by Indonesian soldiers; the following day 70 men from the village of Imbate were marched out and all killed.
During the Indonesian period, Oecussi was as neglected as it had been during Portuguese rule. There is just one dirt road from the Indonesian town of Kefamenanu to Pante Macassar, via Pasar Tono, a large market along the Tono river where people from all over the region come to trade their produce. The enclave population is almost 60,000. The largest ethnic group are the Dawan or Atoni (about 20,000) who speak the Balkeno language. Pante Macassar is a town of around 8,000 people and has wide streets and a few Portuguese buildings, like the Concelho (Administrative Office) and a church. Inland Oecussi is dotted with traditional thatched houses.