Lisbon dates back to pre-Roman times - legend has it that Ulysses founded the city, although it was more probably the Phoenicians. Its early years were spent as a constant battleground, with Phoenicians, Greeks and Carthaginians in turn overthrown. In 205 BC the Romans began their two-century reign in Lisbon, and it became the most important city in the western Iberian region, renamed Felicitas Julia by Julius Caesar.

In 714 the powerful Moors arrived from Morocco, replacing a succession of northern tribes. They fortified the city and held out against Christian attack for an impressive 400 years. By 1147 the Moors' luck had turned and the Christians finally recaptured Lisbon. (It took another century for Christian forces to complete the reconquest of Portugal.) In the mid-13th century Lisbon replaced Coimbra as Portugal's capital and developed rapidly on the back of booming maritime and inland trade.

The 15th century brought the Age of Discoveries - Portugal's golden era of sea exploration. Not satisfied with repelling the Moors from Portuguese soil, Prince Henrique (Henry the Navigator) decided to sap Islam's economic power by finding a way around it by sea. He put to work the best sailors, map makers, ship builders and astronomers he could find. In 1434 one of his ships sailed beyond the much-feared Cape Bojador on the West African coast, breaking a maritime superstition that this was the end of the world. The Prince was rewarded with gold and slaves from West Africa. In 1497 came Vasco da Gama's famous discovery of the sea route to India. The wealth from these expeditions transformed Lisbon into the opulent seat of a vast empire. It also spawned the extravagant Manueline architectural style, best typified in the Mosteiro dos Jerónimos in Belém.

Lisbon's glory days as the world's most prosperous trading centre were short-lived. The cost of expeditions, maintaining overseas empires and attempting to Christianise Morocco brought Portugal to its knees. In 1580, in a bitter blow to national pride, Felipe II of Spain claimed the throne, and it took 60 years for fed-up nationalists to overthrow their traditional rival and return Portugal to its people. By the late 17th century the tide had well and truly turned and the discovery of gold in Brazil saw Lisbon enjoy another period of profligate expenditure. Again, however, this extravagance was cut short. In 1755 a massive earthquake reduced the city to rubble and Lisbon never recovered its power and prestige. After Napoleon's four-year occupation of the city Lisbon, like the rest of the country, fell into political chaos and military insurrection for over a century.