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For cocktail folks, Curaçao is the orange-flavored liqueur with the inexplicable blue tint that can add a touch of sweetness and brightness to a Mai Tai. But, before it became a staple of the back bar, Curaçao was better known as an island in the Caribbean, the largest of the Dutch Antilles and a center of power among its neighbors, including Aruba and Bonaire. In October of this year, the island of Curaçao will become the nation of Curaçao and, as a result, the Dutch Antilles will be dissolved. In anticipation of the event, the local tourist board is stepping up its efforts to attract visitors. The island boasts unspoiled beaches, charming colonial architecture, and clear blue waters ranked among the top diving destinations in the world. What interested me on a recent visit, however, was a different blue liquid: the one in the bottle.

It comes as little surprise that Curaçao the liqueur is originally from Curaçao the island. Yet the tall beacons of blue that radiate from bars across the United States generally do not come from the Caribbean. The original liqueur has been made in a Dutch colonial mansion on the island since 1896. It comes in a variety of colors: red, green, amber, clear and, yes, blue. But it wasn't until the Dutch company Bols developed its own version of Curaçao and colored it blue that the liqueur became associated with its color. The original now sports a label proclaiming it "Curaçao of Curaçao." The bottle is short and round, characterized by a rough dimpling that is meant to recall the peel of the orange from which the liqueur is made. Only 600 cases of it are exported to the U.S. each year.

"The problem is that with a name that is a country or an island, you can't protect it," John Bradshaw, the production manager at the distillery, told me. "So, anybody can make Curaçao liqueur ... and call it Curaçao."

Bradshaw, a chemist by training, is one of five people the distillery employs. Working with the master distiller, he is responsible for guarding the recipe and making sure each batch of Curaçao is like the last. He has the racially ambiguous look of many of his fellow islanders: his genetic makeup includes Dutch, African, and indigenous ancestry—maybe some Spanish, too. When Christopher Columbus discovered the island in the 15th century, it was inhabited by the Caiquetos, a tribe of peaceful Arawak Indians who towered over the Spanish. It was named Island of Giants until it was confirmed that no gold could be found there, at which point it was promptly renamed isla inútil: useless island.

The Spanish brought with them Valencia oranges, which grew juicy and sweet back home. But, in this dry Caribbean climate, where cacti and aloe plants flourish, the fruits came in bitter, practically inedible, and became known as Larahas. The groves were left untouched for decades until someone (not even Bradshaw knows who) had the good sense to sun-dry the peels, then distill them. Today, the Curaçao distillery gets most of its Laraha oranges from a family, the Kostors, that lives on the eastern side of the island. But anyone with a tree is invited to sell citrus to Bradshaw.

"The way we're doing it now is the same way we did it 115 years ago," Bradshaw explained. "We put the dried peels in cloth bags with spices and herbs that are very secret. I cannot tell you what they are. We tie the bags with a rope and hang them in a very large copper kettle. We add alcohol: 96 percent pure alcohol. Then, we cook them for three days in the kettle. It's just like making tea. We cool down the kettle, take out the bags ... and distill it for three days."

Once distillation is complete, sugar, a little more alcohol, and water are added. The result is clear. Coloring is the last step before bottling. Islanders are proud of the product and its worldwide popularity, despite its fame being won by larger distilleries that copied the formula. (Bradshaw maintains that the original, made in small batches, will always be better than other mass-produced versions.) As for drinking it, most locals find it too sweet. Instead, they use it to make desserts, like cashew cake or syrup for pouring over ice cream. Not that the production manager knows anything about it firsthand.

"I'm not a drinker myself," revealed Bradshaw. "I'm a diabetic, so liqueur is out of the question. I don't drink alcohol at all."

In the recent history of what has come to be called mixology, Curaçao has been used to create untold numbers of sickly sweet blue-tinted concoctions. Thankfully, the cocktail renaissance—and, in particular, the tiki drinks revival—has bartenders in major cities around the world using the liqueur in tasteful moderation, and not just to dye drinks a kitschy blue. In a Mai Tai, for example, just half an ounce adds a hint of orange to the notes of vanilla and caramelized nuts you get from aged rum and almond-flavored orgeat syrup. In a Pegu Club, it takes only three-quarters of an ounce to sweeten the sharper flavors of gin, lime juice, and bitters. And, if made properly, neither drink should come out blue.