Sibiu was founded some time in the 12th century, perhaps even earlier. It is first documented as existing in 1192, but there had probably been a settlement here for many decades, even centuries before. By the end of the 14th century the city had become an important trading centre, and there were 19 trade guilds listed in a register dating from 1376, more than 40 by the end of the 1500s. The town was for much of the medieval period (and beyond) the easternmost ethnic German city in Europe. It was the largest of the seven Transylvanian cities that became known by the German name Siebenbürgen (literally seven cities), and from the early 1400s was home to the Universitas Saxorum, the assembly of Germans in Transylvania.

The city shot to real stardom however when it was made the capital of Transylvania after the principality formally became a part of the Habsburg Empire in 1692. While the King of Hungary was the nominal Prince (and ruler) of Transylvania, he ruled via a Governor who was based in Sibiu. Perhaps surprisingly, it was during this period that the ethnic Romanian population of the city began to grow, and during the latter part of the 18th century and much of the 19th, the city became a key centre in the struggle to define a Romanian national consciousness. The first Romanian-owned bank had its headquarters here (the Albina Bank), as did ASTRA (Transylvanian Association for Romanian Literature and Romanian’s People Culture). After the Romanian Orthodox Church was granted full legal status within the Habsburg Empire from the 1860s onwards, Sibiu became the seat of the church in Transylvania, and the city is still regarded as the third most important centre of the Romanian Orthodox Church, after Bucharest and Iasi. Between the Hungarian Revolution of 1848-9 and 1867 (the year of the Compromise), Sibiu was the meeting-place of the Transylvanian Diet.

After World War I, when Austria-Hungary ceased to be, Sibiu, like the rest of Transylvania, became part of Romania. The majority of Sibiu’s population remained ethnically German however until 1941, when Romanians are first recorded as being the largest ethnic group. The city retained a large German community until the revolution of 1989 (in which Sibiu played an active role), since when most Germans have emigrated. Among the roughly 2,000 who have remained is Klaus Johannis, mayor of the city from 2000 until 2014, when he became president of Romania.

The total population of the city today stands at around 170,000.