Located to the oceanside off the upper end of Lower Matecumbe Key.

1733 shipwreck location chart shows Cayo de la Matanza. Another 1733 wreck chart shows the legend Cayos de Frances. Liguera chart (1742) shows Cayuelo de las Matanzas. Alaña chart (1743) shows at this location Cayo Franses. DeBrahm chart (1772) shows Matance. Romans chart (1774) shows Matanca. Gauld (1775) notes that Bahamians in the area used the names Indian Kay and Kay Comfort interchangeably. An 1820 Spanish Derrotero has Cayo Indiano. Gerdes, in his Reconnaissance of the Florida Reefs and all the Keys (1849) states: "Indian Key is not called Matanzas but instead Indian Key."

Bernard Romans states that "This key is called Matanca i.e. Murder from the catastrophe of a French crew said to have amounted to near three hundred men, who were unfortunate enough to fall into the hands of the Coloosas, which savages destroyed them to a man on this spot." It is generally believed that Romans originated the story of the massacre, as no earlier accounts of the incident have been found. However, the map drawn by Father Alaña in 1743 uses the name Cayo Franses (SP.- French Key) for the island, as does one of the 1733 shipwreck charts. This may well lend credence to Romans' account. In addition, George Gauld, in his "Observations on the Florida Kays, Gulf, and Reef" (1774) quotes a captain Barton of Carolina as follows: "Off Matacumba lies a small Kay, called Frenchman's Kay." Indian Key has been significant throughout the history of the area from the earliest days of Spanish exploration to modern times. The island has been the site of settlements and enterprise almost continuously. In 1836, Indian Key became the County seat of the newly-created Dade County. In 1840, the key was the site of another Indian attack, when Dr. Henry Perrine and several other residents were killed and the town was burned by "Spanish Indians" under a chief named Chakaika. Nearby Alligator Reef Lighthouse was pre-assembled here and transported in sections to the reef where it was erected in 1872-73.