In 1582 the island was granted to Sir Richard Collum, but by the end of the 16th century it was in the ownership of Sir Valentine Browne, Earl of Kenmare. Subsequent earls developed the island as a tourist attraction throughout the late 17th/early 18th century. By 1840 visits to the island declined and by the beginning of the 20th century Innisfallen was in the ownership of the McShain family. In 1973, the McShain family passed Innisfallen, and most of the Muckross Estate, into State ownership. Both are now part of Killarney National Park.
A strange story is recorded by T. Crofton Croker in Legends of Kerry (1972). It describes how a member of the monastic community on Innisfallen, Father Cuddy, set out on a boat one morning to collect wine from Muckross Friary. He was warmly welcomed, and promises were made that wine would be sent back to Innisfallen. However, on his return journey, Father Cuddy heard an unfamiliar bird signing a beautiful song. As he listened, the song grew louder, and Father Cuddy knew the music was not of this world, causing him to fall to his knees and pray. When the music stopped, Father Cuddy looked around in astonishment at a place all at once familiar and changed. The mountains were still majestic, the lake waters still rippled with reflected light, but wild forest grew where once fields were tended, and roads were swallowed by woodland. The weather was cold and wintry, in contrast to the bright summer’s day that began his journey. He stood, and noticed that his knees had left imprints in the stone. Baffled, he set off for Innisfallen Island as quickly as he could, to report these eerie and unearthly events. When he arrived, instead of the monkish porter he met a man dressed in strange clothes. Father Cuddy asked had the wine arrived, but the man looked confused, and asked him his business. Father Cuddy told the man that he set out the day before to order wine for the monastery. The man was astonished, and told Father Cuddy that the monastery was long gone, its community scattered and the lands granted to Robert Collan by Queen Elizabeth of England. The man told Father Cuddy that he had heard a story of a monk who had set out to collect wine but who had never returned. It was thought he must have drowned in the lake, but that this had all occurred some 200 years ago. He warned the shocked Father Cuddy that priests and monks were no longer welcome in Ireland, and that he should flee. Father Cuddy realised that he had fallen under a miracle or enchantment of some sort, and grieved for his friends and community that he left, now unreachable across time. He travelled to Dingle to take ship to Spain, where he quietly lived out the rest of his days in a monastery in Malaga.