According to Greek mythology, the young Zeus was raised in a cave on Mt. Zas ("Zas" meaning "Zeus"). Homer mentions "Dia"; literally the sacred island "of the Goddess". Károly Kerényi explains:

This name, Dia, which means 'heavenly' or 'divine', was applied to several small craggy islands in our [Aegean] sea, all of them lying close to larger islands, such as Crete or Naxos. The name "Dia" was even transferred to the island of Naxos itself, since it was more widely supposed than any other to have been the nuptial isle of Dionysus.

One legend has it that in the Heroic Age before the Trojan War, Theseus abandoned Ariadne on this island after she helped him kill the Minotaur and escape from the Labyrinth. Dionysus (god of wine, festivities, and the primal energy of life) who was the protector of the island, met Ariadne and fell in love with her. But eventually Ariadne, unable to bear her separation from Theseus, either killed herself (according to the Athenians), or ascended to heaven (as the older versions had it).

Tourism
Naxos is a popular tourist destination, with several ruins. It has a number of beaches, such as those at Agia Anna, Agios Prokopios, Alikos, Kastraki, Mikri Vigla, Plaka, and Agios Georgios, most of them near Chora. As other cycladic islands, Naxos is considered a windy place perfect for windsurfing, as well as kitesurfing. There are seven sports clubs in the island that offer both of these sports and other water activities.

Agriculture
Naxos is the most fertile island of the Cyclades. It has a good supply of water in a region where water is usually inadequate. Mount Zeus (1,004 metres or 3,294 feet) is the highest peak in the Cyclades, and tends to trap the clouds, permitting greater rainfall. This has made agriculture an important economic sector with various vegetable and fruit crops as well as cattle breeding, making Naxos the most self-sufficient island in the Cyclades. Naxos is well known within Greece for its "Arseniko Naxou" cheese, potatoes and Kitron, a local lemon-citrus spirit.

Marble
The quarrying of marble on Naxos began before 550 BCE. Naxian marble was used for the creation of the roof tiles at ancient Olympia and on the Athenian Acropolis, As of 2016, about 5,000 m³ of high value Naxian marble was being exported annually.