Valletta was founded by the Knights of St John, who designed it in their Crusader Hospitaler tradition as a place to treat injured soldiers and pilgrims during the later crusades. Before the arrival of the Knights, Mount Sceberras, on which Valletta stands, rising between two natural harbors, was a dry, unused promontory.

The rocky spit was bare except for St Elmo, a small watchtower at its tip. Grand Master La Valette, the hero of the Great Siege of 1565 in which Turkish troops failed to take Malta, understood that if the Knights, recently expelled from Rhodes by those same Ottoman Turks, were to continue their stay in Malta, they needed adequate defenses. Thus, he prepared a plan for a walled city on the rocky peninsula.

Pope Pius V and Philip II of Spain expressed interest in the idea. They promised financial aid, the Pope sending military engineer Francesco Laparelli to assist the Knights. Laparelli made the plans for the new settlement with the required defenses.

Work was begun in March 1566 – on the bastions first, and shortly thereafter, on important public buildings. The new city would be named in honor of La Valette.

La Vallette died in 1568, before its completion. Pietro del Monte, who replaced him, went on with the construction according to plan. By 1571, the Knights moved their headquarters from nearby Vittoriosa (Birgu) to Valletta.

Laparelli left Malta in 1570. His assistant, local architect Gerolamo Cassar, took over. Having spent time in Rome previously, Cassar knew the latest construction styles. Cassar planned and supervised the erection of many of the early buildings, including the main hospital, Sacra Infermeria, St John's (Co-Cathedral), the Grand Master's Palace and the seven Inns of Residence of the Knights (auberges).

The new city, surrounded by strongholds and moats, grew in strategic value. Valletta’s uniform grid street plan is unusual, planned for the city's defense. The streets running the length of grid drop towards the tip of the peninsula. The cross-streets begin and end with steps of irregular dimensions, having been constructed for knights in heavy armor to climb them.

By the 17th century, Valletta's population had grown considerably. People from all over Malta came to live within its confines, while Mdina, Malta's previous capital, began to lose its appeal.

By this time, Cassar's austere mannerist style had been replaced a more lavish one, building palaces and churches with elegant facades and rich sculptural themes.

Napoleon took Malta in 1798, but lost it to the British two years later. The British, who ruled the high seas at the time, would make Valletta's harbor their Mediterranean fleet's headquarters until Malta gained independence in 1964.

The city’s defenses were never tested by the weapons that existed at the time of its construction. It would not be until World War II, when British Malta was struck by German and Italian firepower from the air.

Valletta was seriously damaged by the bombing, but the city survived the terrible blow and much was rebuilt within a few years. The scars of the war are still visible today in the place where the Opera House once stood. Right in the center of Valletta, the country’s decision-makers are still undecided as to what should be built on the site.

After the war many Valletta residents moved to more modern homes in Malta. The population dropped below 10,000. There appears now to be a return to Valletta as many people are attracted by its unusual architecture.

Valletta, the smallest capital of the European Union, is now Malta’s commercial and financial centre. Many tourists visit it every day, as they take in the city’s rich history. Unsurprisingly, the hotel district is outside the city altogether, concentrated in Sliema and San Giljan (St. Julian).