Rome's early history is shrouded in legend. According to Roman tradition, the city was founded by Romulus on 21 April 753 BC.

The legendary origin of the city tells that Romulus and Remus decided to build a city. After an argument, Romulus killed his brother Remus. Archaeological evidence supports the view that Rome grew from pastoral settlements on the Palatine Hill built in the area of the future Roman Forum. While some archaeologists argue that Rome was indeed founded in the middle of the 8th century BC, the date is subject to controversy. The original settlement developed into the capital of the Roman Kingdom (ruled by a succession of seven kings, according to tradition), and then the Roman Republic (from 510 BC, governed by the Senate), and finally the Roman Empire (from 27 BC, ruled by an Emperor). This success depended on military conquest, commercial predominance, as well as selective assimilation of neighbouring civilisations, most notably the Etruscans and Greeks. From its foundation Rome, although losing occasional battles, had been undefeated in war until 386 BC, when it was briefly occupied by the Gauls. According to the legend, the Gauls offered to deliver Rome back to its people for a thousand pounds of gold, but the Romans refused, preferring to take back their city by force of arms rather than ever admitting defeat, after which the Romans recovered the city in the same year.

The Roman Republic was wealthy, powerful and stable before it became an empire. According to tradition, Rome became a republic in 509 BC. However, it took a few centuries for Rome to become the great city of popular imagination, and it only became a great empire after the rule of Augustus (Octavian). By the 3rd century BC, Rome had become the pre-eminent city of the Italian peninsula, having conquered and defeated the Sabines, the Etruscans, the Samnites and most of the Greek colonies in Sicily, Campania and Southern Italy in general. During the Punic Wars between Rome and the great Mediterranean empire of Carthage, Rome's stature increased further as it became the capital of an overseas empire for the first time. Beginning in the 2nd century BC, Rome went through a significant population expansion as Italian farmers, driven from their ancestral farmlands by the advent of massive, slave-operated farms called latifundia, flocked to the city in great numbers. The victory over Carthage in the First Punic War brought the first two provinces outside the Italian peninsula, Sicily and Sardinia. Parts of Spain (Hispania) followed, and in the beginning of the 2nd century the Romans got involved in the affairs of the Greek world. By then all Hellenistic kingdoms and the Greek city-states were in decline, exhausted from endless civil wars and relying on mercenary troops. This saw the fall of Greece after the Battle of Corinth 146 BC and the establishment of Roman control over Greece.
 
The Roman Empire at its greatest extent

The Roman Empire had begun in a more formalised way when Emperor Augustus (63 BC-AD 14; known as Octavian before his throne accession) founded the Principate in 27 BC. This was a monarchy system which was headed by an emperor holding power for life, rather than making himself dictator like Julius Caesar had done, which had resulted in his assassination on 15 March, 44 BC. At home, Emperor Augustus started off a great programme of social, political and economic reform and grand-scale reconstruction of the city of Rome. The city became dotted with impressive and magnificent new buildings, palaces, fora and basilicae. Augustus became a great and enlightened patron of the arts, and his court was attended by poets as Virgil, Horace and Propertius. His rule also established the Pax Romana, a long period of relative peace which lasted approximately 200 years.Following his rule were emperors such as Caligula, Nero, Trajan, and Hadrian, to name a few. Roman emperor Nero was well-known for his extravagance, cruelty, tyranny, and the myth that he was the emperor who "fiddled while Rome burned" during the night of 18 to 19 July 64 AD.

Roman dominance expanded over most of Western Europe and the shores of the Mediterranean Sea, though its influence through client states and the sheer power of its presence was wider than its formal borders. Its population surpassed one million inhabitants.For almost a thousand years, Rome was the most politically important, richest, and largest city in the Western world. After the Empire started to decline and was split, it lost its capital status to Milan and then to Ravenna, and was surpassed in prestige by the capital of the Eastern Roman Empire, Constantinople, whose Greek inhabitants continued through the centuries to call themselves Roman.