The square was built in 1821 at the site of the ruins of a medieval Capuchin monastery, which had been abolished during the reign of Habsburg Emperor Joseph II. The square was used for ceremonial purposes during the Congress of Ljubljana, after which it was named. After the congress, a park was laid out in the center of the square, which soon acquired the name Star Park (Slovene: Park Zvezda, German: Sternallee) due to its layout. During the communist period it was renamed Revolution Square (Slovene: Trg revolucije) and a few years later Liberation Square (Slovene: Trg osvoboditve), but the local population continued to use the old name. In 1990, it regained its original name.

The square has had a highly symbolic role in modern Slovenian history. On October 29, 1918, independence from Austrian-Hungarian rule and the establishment of the State of Slovenes, Croats and Serbs was proclaimed during a mass demonstration on the square. In May 1945, the Yugoslav Communist leader Josip Broz Tito first visited Slovenia after World War II and held a speech on the balcony of the University of Ljubljana, which faces the square.

On June 22, 1988, the first free mass demonstration was held on the square demanding the release of four Slovene journalists imprisoned by the Yugoslav army. The demonstration marked the beginning of the Slovenian spring which culminated in the declaration of Slovenia’s independence on June 25, 1991. Independence was first demanded in the May Declaration, written by the Slovenian democratic opposition and signed by numerous civil society movements; the declaration was first publicly read by the poet Tone Pavček in a demonstration on Congress Square on May 8, 1989. In 1999 Bill Clinton became the first U.S. president to visit Slovenia. On June 21, he publicly addressed the crowd gathered on Congress Square, quoting the opening verses of the Slovenian national anthem.