Based on data aquired in 13 orbits of Hubble Space Telescope time, we present a detailed evolutionary history of the M31 dSph satellite Andromeda XVI, including its lifetime star formation history (SFH), the spatial distribution of its stellar populations, and the properties of its variable stars. And XVI is characterized by prolonged star formation activity from the oldest epochs until star formation was quenched ∼6 Gyr ago, and, notably, only half of the mass in stars of And XVI was in place 10 Gyr ago. And XVI appears to be a low-mass galaxy for which the early quenching by either reionization or starburst feedback seems highly unlikely, and thus it is most likely due to an environmental effect (e.g., an interaction), possibly connected to a late infall in the densest regions of the Local Group. Studying the SFH as a function of galactocentric radius, we detect a mild gradient in the SFH: the star formation activity between 6 and 8 Gyr ago is significantly stronger in the central regions than in the external regions, although the quenching age appears to be the same, within 1 Gyr. We also report the discovery of nine RR Lyrae (RRL) stars, eight of which belong to And XVI. The RRL stars allow a new estimate of the distance, (m ‑ M)0 = 23.72 ± 0.09 mag, which is marginally larger than previous estimates based on the tip of the red giant branch. Based on observations made with the NASA/ESA Hubble Space Telescope, obtained at the Space Telescope Science Institute, which is operated by the Association of Universities for Research in Astronomy, Inc., under NASA contract NAS 5-26555. These observations are associated with program #13028.