During a polio epidemic in the Hawaiian Islands in 1952, Niihau became known as the "Forbidden Isle" because it required all visitors to have a doctor's note in an attempt to prevent the spread of the disease. Today, it continues to earn the nickname as the island is privately owned and visitation is restricted.

Because it lies in the rain shadow of Kauai and lacks the elevation needed to catch significant amounts of trade wind rainfall, Niihau is subject to long periods of drought. During a visit in 1792, Captain George Vancouver was told that the people of Niihau had abandoned the island because of a severe drought and moved to Kauai to escape famine.

Niihau has no telephone services and no paved roads. Horses are the main form of transportation, but bicycles are also used. There is no plumbing or running water on the island. Water comes from rainwater catchment, and solar power provides all electricity.

Niihau's secluded shoreline offers the critically endangered Hawaiian monk seal (Monachus schauinslandi) a safe haven from habitat encroachments. It is the only seal native to Hawaii, and, along with the Hawaiian hoary bat, one of only two mammals endemic to the islands.

To make some money from the outside world, locals gather shells from the shores of the Forbidden Island. The tiny Niihau shell was once considered to be the flower of Niihau, as the arid island was not ideal for growing flowers. It sometimes takes years and a number of artisans to create Niihau shell leis, known as lei pūpū, which are considered extremely valuable all over the world.

Halalii Lake is a "playa" or "intermittent lake" that appears after rainfalls. It measures about 840 acres during the rainy seasons, making it the largest lake in the Hawaiian Islands, but transforms into a dry reddish flat during the frequent droughts.

Pu'uwai (literally, "heart" in Hawaiian) is the only settlement on the island of Niihau. It has less than 200 residents, and most of the community lives as it did hundreds of years ago, with very few modern amenities.

Elizabeth Sinclair purchased Niihau and parts of Kauai from Kamehameha V in 1864 for $10,000 (equivalent to about $170,000 in 2020) in gold. The island's private ownership passed to her descendants, and in 1915, Sinclair's grandson Aubrey Robinson closed the island to most visitors. Even relatives of the inhabitants could visit only by special permission.

Residents mostly speak the Niihau dialect of Hawaiian as their first language, in part encouraged by terms in the original purchase agreement which obligated the new owners to preserve Hawaiian culture and tradition. Oral tradition suggests that the Niihau dialect is closely related to the Hawaiian dialect spoken during the time of first contact with Europeans.

Smoking and drinking are forbidden on Niihau, along with owning guns. And Sundays are reserved for church.