For centuries the area served as the site for public executions. The Grassmarket also served as the city's main weekly market after being granted a charter by James III in 1477.

The area is now one of Edinburgh's main night spots with numerous pubs and clubs lining the street.

Sir Walter Scott described the Grassmarket in his 1818 novel The Heart of Midlothian:

In former times, England had her Tyburn, to which the devoted victims of justice were conducted in solemn procession up what is now called Oxford Street. In Edinburgh, a large open street, or rather oblong square, surrounded by high houses, called the Grassmarket, was used for the same melancholy purpose. It was not ill chosen for such a scene, being of considerable extent, and therefore fit to accommodate a great number of spectators, such as are usually assembled by this melancholy spectacle. On the other hand, few of the houses which surround it were, even in early times, inhabited by persons of fashion; so that those likely to be offended or over deeply affected by such unpleasant exhibitions were not in the way of having their quiet disturbed by them.