Lisbon is the capital of Portugal . Portuguese Lisboa , city , seat of Lisboa distrito ( district ) and capital of Portugal . It was once a remote outpost that was thought to lie at the farthest edge of the known world . Once a remote outpost on what was thought to be the farthest edge of the known world , by the 15th century Lisbon was established as the centre of operations for Portuguese exploration . The city flourished as the center of operations for Portuguese exploration in the 15th century . Once a remote outpost on what was thought to be the farthest edge of the known world , by the 15th century Lisbon was established as the centre of operations for Portuguese exploration . Present-day Lisbon remains the country's chief port and largest city . It is the country's chief port , largest city , and commercial , political , and tourist centre . It is also a major commercial and political center . It is the country's chief port , largest city , and commercial , political , and tourist centre . Lisbon is a seaside city of white houses and elegant parks and gardens . Although this seagirt city of white houses and elegant parks and gardens is no longer the capital of a vast overseas empire , it remains a busy commercial and tourist centre . The official entrance to Lisbon is a broad marble stair . The river is indeed an ever-present part of the city's decor , and the official entrance to Lisbon is a broad marble stair mounting from the water to the vast , arcaded Commerce Square ( Praca do Comercio) . It rises from the river to a large square filled with archways . The river is indeed an ever-present part of the city's decor , and the official entrance to Lisbon is a broad marble stair mounting from the water to the vast , arcaded Commerce Square ( Praca do Comercio) . To the north is Lisbon's central commercial district , the Cidade Baixa ( Lower City) . The square lies at the south end of Lisbon's central district , the Cidade Baixa ( "Lower City") . The city's main street is the Avenida da Liberdade ( Liberty Avenue) . The Rossio is a traditional centre of activity and the starting point of the city's main promenade , the wide , gently sloping Avenida da Liberdade . Its wide , mosaic-covered sidewalks lead to the more modern sections of town . This tree-lined boulevard leads north from the city centre to more modern sections of the town . The medieval Alfama district is the oldest part of the city . To the east of the Baixa lies the Alfama , the oldest part of the city , where narrow , winding streets crowd down to the river between a jumble of houses . The Bairro Alto ( High Quarter ) dates mainly from the 17th century . The Bairro Alto ( "Upper District" ) , for example , dates primarily from the 17th century . Some of its streets are so steep that they give way to stairs , cable cars , and even an elevator . Some of its streets , especially those leading down to the Baixa , are so steep that they give way to stairs , cable cars , and even an elevator ( an iron structure designed by the French engineer Gustav Eiffel) . The interiors of several of Lisbon's churches are decorated in gold , marble , carved wood , and rare tiles . In gold , marble , carved wood , and rare tiles , these interiors are decorated in Baroque , Rococo , or rocaille . One outstanding example is the 16th-century church of Sa~o Roque . One outstanding example is the 16th-century church of Sa~o Roque , whose unpretentious exterior belies its opulent collection of azulejos , paintings , and mosaics inlaid with semiprecious stones . As the capital of Portugal , Lisbon houses all the main institutions of the country . As the capital of Portugal , Lisbon and its surrounding suburbs house all of the principal institutions of the republic . The parliament meets at the Palace of the National Assembly . The nation's parliamentary body meets at the Palace of the National Assembly ( Palacio da Assembleia Nacional ) , which also houses the National Archives . A former royal palace is now the official home of the president of Portugal . Another royal palace , built in Belem in 1700 , is now the official residence of the president of Portugal . The city is home to two main theaters and an orchestra . The city has two principal theatres , the St . Charles ( Sa~o Carlos ) and the National Theatre of Dona Maria II . The Gulbenkian Foundation and Museum presents music , ballet , and exhibits of visual arts . Lisbon's Calouste Gulbenkian Foundation and Museum , a cultural centre named for its benefactor , an Armenian oil-lease negotiator , presents music and ballet as well as exhibits of the other fine arts . Other Lisbon museums are devoted to ancient carriages , city history , many forms of art , and painted tiles called azulejos . The city has more than a dozen other museums , including those of modern , antique , sacred , decorative , and folk arts . Other Lisbon museums are devoted to ancient carriages , city history , many forms of art , and painted tiles called azulejos . Two specialized , rather unusual museums are the Azulejo Museum and the Coach Museum . The Lisbon area has become one of Portugal's most important centers of manufacturing . The greatest development in recent years , however , has come just outside the city limits on the south bank of the Tagus; the district has become Portugal's most important manufacturing centre . The city's traditional industries include the making of soap , weapons , and steel . To the long-established local industries of soapmaking , munitions , and steel manufacture have been added glassmaking , electronics , margarine manufacture , and diamond cutting . The city's traditional industries include the making of soap , weapons , and steel . The petroleum refinery , largely state supported , has also been expanded . Newer industries include oil refining , diamond cutting , and the production of glassware , electronics , margarine , and cork . To the long-established local industries of soapmaking , munitions , and steel manufacture have been added glassmaking , electronics , margarine manufacture , and diamond cutting . Newer industries include oil refining , diamond cutting , and the production of glassware , electronics , margarine , and cork . The petroleum refinery , largely state supported , has also been expanded . The area houses one of the world's largest cement plants . One of the world's largest cement plants is found on the far bank , along with grain elevators , a steelmaking complex , a cork factory , and a plastics plant . According to legend , the ancient Greek hero Ulysses was the founder of Lisbon . The city's ancient name , Olisipo , may be derived from the Phoenician alis ubbo ( "delightful little port" ) or from the legend that the city's founder was Ulysses . However , it seems likely that the Phoenicians founded the city in about 1200 BC as a trading station . Although it seems likely that the city was founded c . 1200 BC as a trading station by the far-ranging Phoenicians , there is no unassailable proof of the story . The area was under Roman rule from about 200 BC to AD 400 . Whatever the city's origins , it is known that the area was under Roman domination from 205 BC to c . AD 409 and that Julius Caesar raised the settlement to the dignity of a municipium and named it Felicitas Julia . The Visigoths , a Germanic people , took control of Lisbon in the 6th century . The Romans lost the city to the migratory peoples known as the Alani , who were driven out by the Suebi , who in turn were conquered by the Visigoths . The Muslims of North Africa took Lisbon when they overran Spain and Portugal in the 8th century . The Muslims of North Africa took Lisbon when they overran the Iberian Peninsula in the 8th century; they stayed for 433 years , despite incursions by the Normans in 844 and by Alfonso VI of Castile and Leon in 1093 . In 1147 the city fell to the Christian king of Portugal , Afonso Henriques . The city finally fell in 1147 and successfully resisted Moorish attempts to win it back . In 1256 Lisbon became the national capital . Lisbon did not become the national capital until more than a century later , in 1256 . Many of Lisbon's residents became rich . A considerable number of these residents became rich , and the city was endowed with larger and more luxurious buildings . A group of Lisbon nobles drove out the Spaniards and restored Portugal's independence in 1640 . In 1640 a conspiracy of Lisbon nobles struck for freedom and drove out the Spaniards , restoring Portugal's independence . One of the greatest earthquakes ever recorded struck Lisbon in 1755 . The churches were crowded to honour the dead on All Saints ' Day when the city was devastated by one of the greatest earthquakes ever recorded . It is believed that 30,000 people died and more than 9,000 buildings were destroyed . It is believed that 30,000 lives were lost , and more than 9,000 buildings were destroyed . In 1908 Portugal's king and crown prince were murdered in the city . In 1908 Portugal's king and crown prince were assassinated on the northwest corner of Commerce Square . Two years later a republic was declared , with Lisbon as its capital . A republic was declared , and a period of national instability ensued . Portugal's neutrality during World War II ( 1939-45 ) , made Lisbon a shelter for foreigners fleeing the war . There was considerable development in Lisbon throughout this time , and during World Wars I and II the city was able to offer refuge to some 200,000 foreigners .