The square is a continuation of the Avenida Dos Aliados and is the most important in the city.
The square was begun in 1718 to urbanise the city and was originally known as New Square (Praça Nova), originally confined by the old medieval walls and a series of palaces, all of which now have been destroyed. In 1788 the Order of Saint Eligius (Santo Lóios) built a convent on the southern side, where the old walls once stood. This building is today known as Cardosas Palace (Palácio das Cardosas)and at over 200 years old is the oldest building on the square.
In 1819 the Town Hall was moved to a building on the northern side of the square and with that along with the close proximity of D. Luis Bridge and the Sao Bento Train Station, Liberty Square became the political, economic and social centre of the city.
In 1866 the French sculptor Anatole Calmels created the horseback statue of Peter IV (Pedro IV). Known as “the Liberator” as well as “the Soldier King” Peter IV, a member of the House of Braganza, was only 9 years old when the French army invaded in 1807 forcing his family to flee to Brazil
With a revolution in Portugal in 1820 Peters father John VI (João VI) was forced to return to Portugal leaving Peter to rule Brazil. In 1822 he decided to declare Brazil independent of Portugal and proclaimed himself Emperor of Brazil. With the death of his father Peter became King of Portugal in 1826, however he preferred Brazil so he quickly abdicated and handed the country to his sister Dona Maria II.
Several factors conspired to seeing Peter return to Portugal, firstly Dona Maria was overthrown by Peters younger brother Dom Migulel I and secondly Peter had an affair with a female courtier. With his reputation in tatters in Brazil he decided to abdicate the Brazilian throne in favour of his son Peter II (Pedro II) and return to Portugal and go to war with his brother.
The war that developed into a wider conflict between proponents of Liberalism (lead by Peter IV) and those seeking a return to Absolutism (lead by Miguel I). Peter, along with his Liberal supporters emerged victorious.
Peter died of tuberculosis on 24th September 1834, just a few months after his famous victory. Although ruling Portugal for only a short time he is seen as one of the key figures who helped move Portugal and Brazil from Absolutist regimes to representative forms of government.
For this reason, his statue stands in this square that is dedicated to the ideals he so fervently believed in.