St. Stefan is a picturesque, small town surrounded by the sea. In the Middle Ages it used to be a trade and political centre of Paštrović. It is built on a small island near the mainland. Establishment of this settlement was first mentioned in written documents in the 15th century, when twelve houses were built that belonged to the Paštrović brotherhood. In time it became a town where the sessions of the People’s Court were held. The court was called the “bankada”. During wars, people unable to fight in battles hid there. Today it is a hotel-town, connected to the land by an artificial causeway.