About 300,000 years ago the first inhabitants of what is now Istanbul made their home in Yarımburgaz Cave on the shores of Küçükçekmece lake. At the end of the last ice age, when the lake formed, human beings continued to inhabit the cave through the Neolithic and Chalcolithic periods. Meanwhile on the Asian coast of Istanbul, excavations near Dudullu have uncovered tools dating from the Lower Palaeolithic age (around 100,000 years ago). And near Ağaçlı north of the city, Middle Palaeolithic and Upper Palaeolithic period tools have been found. There was an important culture at Fikirtepe on the Kurbağılıdere river in Kadıköy around 5000 BC.

Pioneers from the city of Megara on the Greek mainland, where in ü80 BC Dorian incursions had been causing havoc, and other settlers from Miletus on the Anatolian coast of the southern Aegean, established the city of Chalcedon, what is today Kadıköy on Istanbul's eastern shore. Another group of Megarans consulted the Oracle of Delphi about the situation of their new city, and the oracle told them to found their city opposite the Land of the Blind. The blind turned out to be the Chalcedonians, who had failed to see the superiority of the site on the opposite side of the Bosphorus. So began the history of Byzantium, which was founded in 660 BC on Sarayburnu ('Palace Headland' as the Turks named it in reference to Topkapı Palace). The Chalcedonians and Byzantines got on amicably, placing both their names on coins that they minted jointly.

Walls were constructed around Byzantium, which stood on a peninsula. There was sea on three sides and abundant fish. The Golden Horn inlet was a sheltered harbour right by the city. There was fertile land for agriculture, and it was conveniently placed on the maritime trade routes. All these factors combined to make Byzantium grow quickly in size and prosperity.

But Byzantium's unsurpassed advantages and wealth also made it a tempting target for invaders. In 269 BC it was captured by the Bithynians and looted. In 202 BC the Macedonian threat obliged Byzantium to seek aid from Rome, and this was the first step towards Rome's own possession of the city.

In 73 AD Byzantium became part of the Roman province of Bithynia-Pontus. The Emperor Vespasian contributed to the city's development. In 193, after Byzantium took sides with the Parthians, the Roman emperor Septimus Sevenrus besieged the city, looted it, and pulled down the walls. Subsequently he had the walls rebuilt, and constructed new buildings and streets. He began constnıction of the Hippodrome. In 269 the city was attacked by the Goths, who to mark their victory erected a column close to the sea. In 313 the Nicomedians took the city, but did not hold it for long before Emperor Constantine recaptured it.