Little is known of the history of the settlement prior to the Muslim period. Hindu legend attributes the founding of Lahore to Lava, or Loh, son of Rama, for whom it is said to have been named Lohawar.

The city has had a turbulent history. Lahore has been the capital of Punjab for nearly a thousand years. It was the capital of the Ghaznavid dynasty from 1163 to 1186. A Mongol army sacked Lahore in 1241. During the 14th century the city was repeatedly attacked by the Mongols until 1398, when it fell under the control of the Turkic conqueror Timur.

In 1524 it was captured by the Mughal Babur's troops. This marked the beginning of Lahore's golden age under the Mughal dynasty. The city reached its full glory under Mughal rule from 1524 to 1752. It was Akbar's capital for the 14 years from 1584 to 1598. He built the massive Lahore Fort on the foundations of a previous fort and enclosed the city within a red brick wall boasting 12 gates. Jahangir and Shah Jahan (who was born in Lahore) extended the fort, built palaces and tombs, and laid out gardens. The last of the great Mughals, Aurangzeb (1658-1707), gave Lahore its most famous monument, the great Badshahi Masjid and the Alamgiri gateway to the fort. It was greatly expanded during the reign of Shah Jahan (1628-58) but declined in importance during the reign of his successor, Aurangzeb.

As Mughal power began to decline in the eighteenth and nineteenth centuries, Lahore suffered a concomitant period of ignominy and political eclipse. Lahore was subjected to a power struggle between Mughal rulers and Sikh insurrectionists.  It was here, at the beginning of the nineteenth century, that the Sikh ruler Ranjit Singh declared himself Maharaja of the Punjab. The city became the seat of a powerful government during his rule (1799-1839). He allowed his troops to desecrate many of the city's beautiful Islamic shrines, including the Badshahi Mosque which was, for a while, converted into a powder magazine.

After Singh's death, the city rapidly declined, and it passed under British rule in 1849. The British erected splendidly pompous Victorian public buildings in the style that has come to be called Mughal-Gohtic.

When the Indian subcontinent received independence in 1947, Lahore became the capital of West Punjab province; in 1955 it was made the capital of the newly created West Pakistan province, which was reconstituted as Punjab province in 1970.

Since Independence in 1947, Lahore has expanded rapidly as the capital of Pakistani Punjab. It is the second-largest city in the country and an important industrial centre.

Nowadays, Lahore is a leading commercial, banking, and industrial centre of the province. Although little industry is located in the city proper, Lahore serves as a distribution centre for the heavily industrialized surrounding area. An educational and cultural centre, the city is the site of the University of the Punjab (1882), the oldest university in Pakistan, and the University of Engineering and Technology (1961).