Just to the west of the village, in an area known as Skipsea Brough, lies Skipsea Castle. Built in 1086, the motte-and-bailey style castle has since been destroyed; however impressive earthworks remain.
The first recorded appearance of the name Skipsea is in the 12th century and the name is of Scandinavian origin, but the actual town-site has been in use much longer. This is of no real surprise, as this part of the English coast was frequented by Viking invaders prior to the Norman Conquest. There is some evidence that the name Skipsea refers to its original Viking meaning of "Ship Lake", but the closest literal meaning of Skipsea is "a lake navigable by ships". This name refers to the village's original location on the edge of a lake, which was suitable for navigation and eel-fishing, that was slightly inland from the sea. This land has since been lost because of erosion, making Skipsea a seaside Village. There is evidence of habitation dating back to the Stone and Bronze Ages because of the 19th century archeological discovery of platforms, presumably for huts.
The borough of Skipsea Castle was first recorded between 1160 and 1175 and may have been founded by William le Gros, Count of Aumale, who died in 1179.
By the end of the 11th century, both Skipsea Castle and a church had been built, which encouraged the growth of a small town. In the following 13th and 14th centuries, local markets and fairs were granted "variously for Skipsea town, Skipsea manor, and Skipsea Brough manor, presumably all the same and possibly by then meaning Skipsea village".
Currently, the economy of Skipsea is based on agriculture and tourism.