[1] Following an extensive rehabilitation project by Pritzker-winning architect Álvaro Siza Vieira, the Chiado has recovered and become one of the most valuable real estate markets in Portugal.

The most widely cited possible origin for the name is related to António Ribeiro (c.1520–1591), a popular poet from Évora who lived in the area and whose nickname was "chiado" ("squeak").

Between 1373 and 1375, during the reign of King Ferdinand I, a new city wall was built that encompassed part of present-day Chiado, favouring its urbanisation and settlement.

The rebuilding plan organised by the Marquis of Pombal included the Chiado, and new streets were opened to link the area with the Baixa Pombalina.

In the early hours of August 25, 1988, a fire started at the Grandella department store in Rua do Carmo (Carmo Street) and quickly spread to Rua Garrett (Garrett Street) and others, affecting a total of 18 buildings (corresponding to an 8000 m2 land footprint) in the Chiado area, of which 11 were full losses with structure collapse, including the Armazéns do Chiado and Grandella department stores, that never reopened, along with several other historical shops also destroyed.

In 1989 the Portuguese architect Álvaro Siza Vieira was invited by the mayor of Lisbon Krus Abecasis to oversee the reconstruction project for the area.

[citation needed] This rebuilding project was mostly completed by 1999, and included a shopping centre on the former Armazéns do Chiado building and the new Baixa-Chiado station of the Lisbon Metro, as well as new public spaces.