The Central Ionian Islands of Cephalonia and Ithaca belong to the most seismically active Greek region, mainly due to the presence of the dextral Cephalonia-Lefkada Transform Fault Zone. The study area has experienced strong earthquakes in the 20th century, including the destructive 1953 sequence with maximum intensity 9.0. The Paliki peninsula, western Cephalonia, hosted two strong earthquakes (Mw= 6.1 and 5.8) in 2014, with ground acceleration reaching ~560 cm/s2 and 735 cm/s2, respectively. This study updates the seismic hazard evaluation in Cephalonia and Ithaca using new data and computational techniques to reduce epistemic uncertainties. The probabilistic approach of Cornell and McGuire was used, and the uncertainties are reduced through data variability of the source models, seismicity data, and Ground Motion Prediction Equations using a logic tree approach, sampled by implementing the Latin Hypercube Sampling method. The spatial distribution of Peak Ground Acceleration and Peak Ground Velocity for return periods of 475 and 950 years indicates low variation in the entire study area and that the Paliki peninsula possesses the highest level of seismic hazard. Additionally, site-specific analysis across the three main towns, Lixouri and Argostoli in Cephalonia and Vathi in Ithaca, reveals that Lixouri has the greatest level of seismic hazard, while Vathi the lowest.