After the tyrant Damoteles was overthrown, the governing of Samos was undertaken by the geomoroi, the great landowners. In about 540 B.C. Samos was forced to recognize the sovereignty of Cyrus. It was at this time, perhaps, that the first Heraeum was burnt. There followed a period of instability until 532 B.C., when Polycrates became tyrant with the help of his two brothers and the support of the traders and craftsmen.

Once Polycrates became tyrant, he exiled, in an attempt to preclude possible conspiracies, certain aristocrats. He strengthened the army which, according to Herodotus, included a thousand archers, and built a fleet of one hundred penteconters. The kind of ship which he planned was a new one - the 'Samaina', an obtuse-prowed bireme. With this fleet, which frequently went on piratical raids, he captured a fair number of islands and certain coastal cities. He forged an alliance with Pisistratus, with Lygdamis tyrant of Naxos, and with Amasis pharaoh of Egypt, thus benefitting the Samian traders in Naucratis. But when Cambyses king of Persia attacked Egypt, in about 525 B.C., Polycrates supplied him with forty ships in an attempt to validate his power. He assigned the management of these vessels to his political opponents, wishing to get them far away from Samos. The upshot of Polycrates' policy was that within ten years Samos had become the principal naval power in the Aegean. Typical is the fact that Samian products, most typically figurines, were discovered in large quantities during excavations at the temples of Lindus and Camirus on Rhodes, Amathus in Cyprus, and Naucratis in Egypt. It has even been argued by some historians that the cities of Rhodes were his subjects.

Herodotus spoke with admiration of the building works executed in Samos during this period: the Tunnel of Eupalinus; the harbour mole two stades long; and the second Heraeum. He did not specify, however, whether the initiative for these works came from the tyrant himself. He did however ascribe to Polycrates the digging of the moat round the walls of Samos, on which Lesbian prisoners-of-war were employed. It is also said that Polycrates collated the Homeric epics and had them written down. Many poets were guests at his court, among them Ibycus of Rhegium in Lower Italy and Anacreon of Teos.

Nevertheless, his power ended violently. In seeking to extend his rule to the whole of Ionia and the isles, Polycrates went to Sardis, where he was murdered. Polycrates' secretary and deputy Maeandrius tried to establish a regime of isonomy. But he was compelled to hand over power to Polycrates' brother Syloson, who landed on Samos with an escort of Persian troops.