Many fields of study have employed geophysical islands in experimental design with a great deal of success. An island is a closed and bounded system in many respects and presents a manageable unit of study. The island microcosm has been the basis for significant advances in areas such as evolutionary biology, ecosystem ecology and physical anthropology. The same properties that make islands so useful to scientists present island populations with pressing sustainability challenges of limited resource availability and natural carrying capacity. This paper discusses the characteristics of the island context to show the severity and immediacy of these challenges. Based on this discussion, it is apparent that new approaches are needed to address sustainable development on islands. Island systems and the study of industrial ecology, which examines industry embedded within the finite natural environment, have much to gain from one another in this respect. Several industrial ecology case studies, primarily drawn from research in Puerto Rico, are presented to illustrate the compatibility of islands as a study unit in this field. Industrial ecology presents new solutions to the challenges of sustainable island development, while well‐defined island systems offer a unique opportunity for the approach of industrial ecology.