Prior to the arrival of Europeans, the Toronto area was occupied by a succession of Native American peoples, such as the Huron, Iroquois, Mississaugas, Petuns, and the Senecas. In 1750, the French founded the first European settlement in the area, called Fort Rouille (also known as Fort Toronto). The settlement also functioned as a trading post.

In 1759, Fort Rouille/Toronto was abandoned by the French, who withdrew from North America after being defeated by the British by September 1760. During and after the American Revolutionary War, United Empire Loyalists, or those who still pledged allegiance to the King, migrated to lands in the vicinity of Toronto and Lake Ontario.

In 1793, the town then known as York was selected by Lieutenant-Governor John Graves Simcoe to replace Newark as the capital of Upper Canada. Simcoe thought York was a better choice for capital; one of the factors for his decision may have been Newark's proximity to the American Fort Niagara.

On March 6, 1834, York reverted back to the Iroquois name "Toronto", which means "place where trees stand in the water". Around this time, the city grew rapidly, thanks to it being a major immigrant destination. Toronto's population grew from 30,000 in 1851 to 181,000 in 1891.

In 1934, the Toronto Stock Exchange became the largest in Canada, affirming the city's status as one of the continent's economic hubs. The Second World War brought another flood of immigrants, and by 1951 Toronto had over one million citizens. This number doubled by 1971; according to the 2005 census, the population of the Toronto metropolitan area now stands at over 5 million people.