Lafayette Square was laid out in 1804 by Joseph Ellicott, a representative of the Holland Land Company and the first developer of Buffalo. It was one of three squares included in his original plan for the City of Buffalo. It was originally called "Court House Park" because Buffalo's earliest courthouse faced the square on a site where the Buffalo and Erie County Public Library now stands. The courthouse was destroyed when the British burned Buffalo in 1813 but was rebuilt in 1817.

On June 17, 1825, over 30,000 people gathered in the square to witness the hangings of brothers Israel, Nelson and Isaac Thayer, convicted in the infamous murder of John Love, a trader from the Town of Boston. It was the last public hanging in Buffalo. In 1831, the Holland Land Company deeded the Square to the Village of Buffalo as a public park.

The City installed a fountain and enclosed the Square with a fence in 1853. The Square was renamed after Revolutionary War hero Marquis de Lafayette in 1879.

Governor Grover Cleveland dedicated the Soldiers & Sailors Monument in 1884. The Square was restored to its 1890s condition in 1988 at a cost of $3 million. After the restoration was complete, the Thursday at the Square concert series, free concerts with food and beverages available for sale, re–located there. The series became very popular beginning in the mid–1990s, weekly attracting thousands to downtown. Every Thursday from late May through the end of August, downtown workers, City residents, and suburbanites enjoy a variety of popular American and Canadian recording artists between 5 p.m. and 8:30 p.m.

From Lafayette Square, turn East to face Niagara Square; the Lafayette Hotel is to the West; The Brisbane and Liberty Bank buildings are at the South end of the block.