The current flag of Tuvalu was instated when the country became independent in 1978, after the separation from the Gilbert and Ellice Islands in 1976.

Like many former and current British dependencies, the Tuvaluan flag is a blue ensign based on the Union Flag, which is shown in the canton of the flag; but has a sky blue field rather than the conventional blue. The previous flag (with the Gilberts) was also based on the Union Flag but with the coat of arms created by Sir Arthur Grimble in 1932, the resident commissioner of the British colony.

The stars represent the nine islands which comprise Tuvalu; the arrangement is geographically correct, with the east towards the top (i.e. north to the left).

The first inhabitants of Tuvalu were Polynesian people. The islands came within the British Empire's sphere of influence in the late 19th century. The Ellice Islands were administered by Britain as part of a protectorate from 1892 to 1916 and as part of the Gilbert and Ellice Islands Colony from 1916 to 1974. In 1974 the Ellice Islanders voted for separate British dependency status as Tuvalu, separating from the Gilbert Islands which became Kiribati upon independence. Tuvalu became a fully independent Commonwealth realm in 1978.