The region was inhabited by about 5,000 Lenape Native Americans at the time of its European discovery in 1524 by Giovanni da Verrazzano, an Italian explorer in the service of the French crown, who called it "Nouvelle Angoulême" (New Angoulême). European settlement began with the founding of a Dutch fur trading settlement, later called "Nieuw Amsterdam" (New Amsterdam), on the southern tip of Manhattan in 1614. Dutch colonial Director-General Peter Minuit purchased the island of Manhattan from the Lenape in 1626 for a value of 60 guilders (about $1000 in 2006); a legend, now disproved, says that Manhattan was purchased for $24 worth of glass beads. In 1664, the English conquered the city and renamed it "New York" after the English Duke of York and Albany. At the end of the Second Anglo-Dutch War the Dutch gained control of Run (a much more valuable asset at the time) in exchange for the English controlling New Amsterdam (New York) in North America. By 1700, the Lenape population was diminished to 200.

In the 19th century, the city was transformed by immigration and development. A visionary development proposal, the Commissioners' Plan of 1811, expanded the city street grid to encompass all of Manhattan, and the 1819 opening of the Erie Canal connected the Atlantic port to the vast agricultural markets of the North American interior. Local politics fell under the domination of Tammany Hall, a political machine supported by Irish immigrants.^[25] Public-minded members of the old merchant aristocracy lobbied for the establishment of Central Park, which became the first landscaped park in an American city in 1857. A significant free-black population also existed in Manhattan, as well as in Brooklyn. Slaves had been held in New York through 1827, but during the 1830s New York became a center of interracial abolitionist activism in the North.

Midtown Manhattan, New York City, from Rockefeller Center, 1932

In the 1920s, New York City was a major destination for African Americans during the Great Migration from the American South. By 1916, New York City was home to the largest urban African diaspora in North America. The Harlem Renaissance flourished during the era of Prohibition, coincident with a larger economic boom that saw the skyline develop with the construction of competing skyscrapers. New York City became the most populous urbanized area in the world in early 1920s, overtaking London, and surpassed the 10 million mark in early 1930s becoming the first megacity in human history. The difficult years of the Great Depression saw the election of reformer Fiorello LaGuardia as mayor and the fall of Tammany Hall after eighty years of political dominance.