During the Roman period, Tarifa was known as Julia Transducta (also known as Julia Joza, or just Transducta). Pliny the Elder's Mellaria town probably is also Tarifa [see Naturalis Historia, 3,7]. The city was also known as the place where citizens of Zelis (near Tingis) resettled. The village of Bolonia near Tarifa was also populated in Roman times (called Baelo Claudia). Roman ruins still exist near the village today.

After the Islamic conquest of southern Spain, the city was fortified starting from the 10th century. Later Tarifa was held by the taifa of Algeciras (1031) and by that of Seville (1057), and subsequently by the Almoravids. After the latter's fall, it lived a short period under another taifa of Algeciras (1231), until becoming part of the Kingdom of Granada. In 1292 it was conquered by Sancho IV of Castile, and two years later it resisted a siege by North African Islamic troops. The town resisted another siege in 1340 from Moroccan troops, eventually leading to the Battle of Río Salado.

In 1514 it become the seat of marquisate including also Bornos, Espera and Alcalá de los Gazules. In the course of the Peninsular War, Tarifa was besieged by French troops on 20 December 1810, and again on 18 October 1811.

Tarifa is sometimes credited with being the origin of the word, tariff, since it was the first port in history to charge merchants for the use of its docks, but other sources point to the Arabic word, ta'rïf, as the origin. The name "Tarifa" itself is derived from the name of the Berber warrior, Tarif ibn Malik.

Historical landmarks of the city include:

Tarifa has become a popular spot for northern-Europeans to spend their summers. The coast of Tarifa is also popular with windsurfers and kitesurfers due to the strong winds of the straits. For this reason Tarifa is also dotted with hundreds of wind turbines.

Tarifa is an renowned place to watch migrating birds, in particular the storks which cross the Straits of Gibraltar in spring and autumn. Also whale and dolphin watching can be done on the 14 kilometer wide Straits.

There are regular ferry services between Tarifa and Tangier and bus services between Tarifa and Algeciras, about 20 km to the northeast, and Seville about 200 km to the north.

Tarifa features a Mediterranean climate with Oceanic influences, with warm summers and very mild winters. Rain is concentrated in winter, with the summers being largely dry. Because of its proximity to the Atlantic Ocean, precipitation in the wet period is quite high; monthly averages exceed 80mm in the two wettest months, December and January. The influence of the ocean has the additional effect of creating a very small annual variation in temperature. Winters are much warmer than those of continental Spain - a phenomenon also due to its southerly location - and summers are less hot that those of other areas of southern Spain - the average daily high in the hottest month, August, is only 24°C, significantly cooler than the temperatures experienced further inland in the Guadalquivir valley, and also a little cooler than those felt further East along the Mediterranean coast in places such as Malaga and Almería.

Tarifa is exceptionally windy, an attribute that is in part due to its location at the meeting point of the Mediterranean Sea and Atlantic Ocean, and the resulting difference in air pressure. Average yearly wind speed is 45 km/h, with the average wind speed in the windiest month - July - 54 km/h, and even in the least windy month, November, the average daily wind speed is 41 km/h.