Nutmeg or Myristica fragrans is an evergreen tree indigenous to the Banda Islands in the Moluccas of Indonesia, or Spice Islands.

There is some evidence to suggest that Roman priests may have burned nutmeg as a form of incense, although this is disputed. It is known to have been used as a prized and costly spice in medieval cuisine, used as flavourings, medicines, preserving agents, that were at the time highly valued in European markets. Saint Theodore the Studite ( ca. 758 – ca. 826) was famous for allowing his monks to sprinkle nutmeg on their pease pudding when required to eat it. In Elizabethan times it was believed that nutmeg could ward off the plague, so nutmeg was very popular.

The small Banda Islands were the world's only source of nutmeg and mace. Nutmeg was traded by Arabs during the Middle Ages and sold to the Venetians for exorbitant prices, but the traders did not divulge the exact location of their source in the profitable Indian Ocean trade and no European was able to deduce their location.

In August 1511, on behalf of the king of Portugal, Afonso de Albuquerque conquered Malacca, which at the time was the hub of Asian trade. In November of that year, after having secured Malacca and learning of the Bandas' location, Albuquerque sent an expedition of three ships led by his good friend António de Abreu to find them. Malay pilots, either recruited or forcibly conscripted, guided them via Java, the Lesser Sundas and Ambon to Banda, arriving in early 1512.The first Europeans to reach the Bandas, the expedition remained in Banda for about one month, purchasing and filling their ships with Banda's nutmeg and mace, and with cloves in which Banda had a thriving entrepôt trade.The first written accounts of Banda are in Suma Oriental, a book written by the Portuguese apothecary Tomé Pires based in Malacca from 1512 to 1515. But full control of this trade was not possible and they remained largely participants, rather than overlords since the authority Ternate held over the nutmeg-growing centre of the Banda Islands was quite limited. Therefore, the Portuguese failed to gain a foothold in the islands themselves.

The trade in nutmeg later became dominated by the Dutch in the 17th century. The British and Dutch engaged in prolonged struggles to gain control of Run island, then the only source of nutmeg. At the end of the Second Anglo-Dutch War the Dutch gained control of Run in exchange for the British controlling New Amsterdam (New York) in North America.

The Dutch managed to establish control over the Banda Islands after an extended military campaign that culminated in the massacre or expulsion of most of the islands' inhabitants in 1621. Thereafter, the Banda Islands were run as a series of plantation estates, with the Dutch mounting annual expeditions in local war-vessels to extirpate nutmeg trees planted elsewhere.

As a result of the Dutch interregnum during the Napoleonic Wars, the English took temporary control of the Banda Islands from the Dutch and transplanted nutmeg trees to their own colonial holdings elsewhere, notably Zanzibar and Grenada. Today, a stylised split-open nutmeg fruit is found on the national flag of Grenada.

Connecticut gets its nickname ("the Nutmeg State", "Nutmegger") from the legend that some unscrupulous Connecticut traders would whittle "nutmeg" out of wood, creating a "wooden nutmeg" (a term which came to mean any fraud)