The square was originally constructed by the Italian colonial rulers on the site of the old bread market (sūq al-khubs), and it was expanded on several occasions during the 1930s.
During the Italian colonial period, it was called Piazza Italia ("Italy Square"). After Libyan independence in 1951, it was known as "Independence Square" during the Libyan monarchy (1951–1969). After the 1969 revolution by Gaddafi, the square was renamed again to "Green Square" to mark his political philosophy in his Green Book.
On the night of 21–22 August, Libyan rebel groups took control of the area during the 2011 Battle of Tripoli and started referring to it as Martyrs' Square to dissociate the square from the Gaddafi government and to commemorate those who died in the fight against his government. On Eid ul-Fitr (31 August) and again on 2 September, tens of thousands of Tripoli residents, including many women and children, gathered on Martyrs' Square to celebrate the end of Gaddafi's rule.
It features the Red Castle Museum (As-Serai al-Hamra), which hosts Libya's Antiquities Department and the National Museum with a collection of Phoenician, Greek and Roman artefacts. The museum also exhibits a statue of Venus from the Hadrianic Baths at Leptis, a complete Libyan-Roman tomb from the Ghirza region, and a colourful Volkswagen Beetle used by Colonel Gaddafi leading up to the revolution. On the other side, a wide avenue leading towards the seafront with two tall pillars. On top of the pillars are an iron-cast, miniature wooden ship; the other one features a horseback rider.
The Royal Miramare Theatre used to be located across from the Red Castle Museum, but it was demolished by Gaddafi's government after the 1960s to create space for large demonstrations.