Due to its economic output, standard of living, and market size, the Grande Lisboa (Greater Lisbon) subregion is considered the second most important financial and economic centre in the Iberian Peninsula. The Lisbon region is the wealthiest region in Portugal and it is well above the European Union's GDP per capita average – it produces 37% of the Portuguese GDP. It is also the political centre of the country, as seat of government and residence of the Head of State.

The city was under Roman rule from 205 BC, when it was already a 1000 year old town. Julius Caesar made it a municipium called Felicitas Julia, adding to the name Olissipo. Ruled by a series of Germanic tribes from the 5th century, it was captured by Moors in the 8th century. In 1147, the Crusaders under Afonso Henriques reconquered the city for the Christians and since then it has been a major political, economic and cultural center of Portugal. Unlike most capital cities, Lisbon's status as the capital of Portugal has never been granted or confirmed officially – by statute or in written form. Its position as the capital has formed through constitutional convention, making its position as de facto capital a part of the Constitution of Portugal.

Lisbon hosts two agencies of the European Union, namely, the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA) and the European Maritime Safety Agency (EMSA). The Community of Portuguese Language Countries (CPLP), is also headquartered in Lisbon.