In Britain's 100 Best Railway Stations by Simon Jenkins, the station was one of only ten to be awarded five stars.
The original terminus of the 1830 Liverpool and Manchester Railway (L&MR) was located at Crown Street, in Edge Hill, to the east of and outside the city centre. A new station in the city centre was needed. Construction of a purpose-built station at Lime Street in the city centre began in October 1833; the land was purchased from Liverpool Corporation for £9,000 (equivalent to £780,000 in 2016). A twin track tunnel was constructed between Edge Hill and the new station before the station was built in 1832; it was used to transport building materials for the station. The architects were Cunningham and Holme, and John Foster Jr.. The station opened to the public in August 1836, although construction was not completed until the following year. This building was designed with four large gateways, two of which were intentionally nonfunctional. Due to the steep incline uphill from Lime Street to Edge Hill, trains were halted at Edge Hill. Locomotives were removed from the trains and the passenger carriages were taken down by gravity, with the descent controlled by brakemen in a brake van. The return journey was achieved by using a stationary steam engine, located at Edge Hill, to haul the carriages up to Edge Hill by rope. This system, constructed by Mather, Dixon and Company under the direction of John Grantham, ended in 1870.
Within six years of opening, the rapid growth of the railways required expansion of the original station. A plan was formed to erect an iron roof similar to that found at Euston station in London, a ridge roof supported by iron columns. However, Richard Turner and William Fairburn submitted a design for a single curved roof, which won the approval of the station committee. The work cost £15,000 (equivalent to £1,430,000 in 2016) and was completed in 1849 with the involvement of William Tite. Meanwhile, in 1845, the L&MR had been absorbed by its principal business partner, the Grand Junction Railway (GJR); the following year the GJR became part of the London and North Western Railway. A group of four columns, adjoining platform 1 and attributed to Edward Woods, date to the 1846–1850 rebuild of the station.
By 1857 two granite columns had been erected outside the station entrance and had become known as the "Candlesticks". In 1867 further expansion was needed and included the present northern arched train shed. Designed by William Baker and Francis Stevenson and with a span of 200 feet (61 m), it was the largest in the world at the time. It was also the first train shed in which iron was used throughout. A second parallel southern train shed was completed in 1879, designed by Stevenson and E.W. Ives; notably, it was of dry construction and each bay took only three days to build.
The station is fronted by a large building in the Renaissance Revival style, the former North Western Hotel. Designed by Alfred Waterhouse, the building was built in 1871 and is now accommodation for students of Liverpool John Moores University.