The street connects the Unter den Linden boulevard with the Prenzlauer Allee arterial road leading to the northern city limits.

In the 1880s, plans for a new traffic routing were developed when it was decided to build a northeastern extension of the Unter den Linden boulevard through the Palace's Lustgarten.

Beyond the river, after lengthy negotiations with numerous property owners, the three historic alleys were combined to a broad street, built according to plans designed by August Orth, to complete the interconnection from Unter den Linden to the New Market square.

The road then led from Spree Island across the new Kaiser-Wilhelm-Brücke through Alt-Berlin, turning slightly north at St. Mary's Church, pass under the Stadtbahn tracks and ending at Münzstraße in the adjacent Scheunenviertel (“Barns' Quarter”) neighbourhood.

[2] During the Nazi era, demolition of the Kaiser-Wilhelm-Brücke began in March 1939 to make room for the Welthauptstadt Germania plans developed by Albert Speer; nevertheless, works ceased shortly after the outbreak of World War II in September.

During the final Battle of Berlin in April 1945, German Wehrmacht troops blew up the remnants of the Kaiser-Wilhelm-Brücke in an attempt to hold back the Red Army advance.

Liebknecht had his lawyer's office nearby and during the German Revolution of 1918–19 had proclaimed a "Free Socialist Republic" at the Berlin Palace on 9 November 1918, shortly before he was murdered by Freikorps paramilitaries.

The former northeastern section of the street, beyond the church, is today known as Rosa-Luxemburg-Straße - named after Rosa Luxemburg, another co-founder of the Communist Party who was likewise killed in 1919.

However, the former Palasthotel near the Liebknecht Bridge has been demolished in 2001 and replaced by the large DomAquarée hotel and office building complex, comprising the DDR Museum, the AquaDom aquarium and a Sea Life Centre.

The street runs northeast, crosses the Liebknechtbrücke, leaving Spree Island, and meets Spandauer Straße, where the Bundesstraßen turn to the right.

It houses several restaurants and shops as well as the Radisson SAS Hotel Berlin, the Sea Life Centre with the AquaDom aquarium and the GDR museum.

Number 13, the northernmost part of a Plattenbau apartment block, holds the Berlin Carré, a shopping mall of about 7,600 square metres (1.9 acres), which was built in 1969 to replace the Zentralmarkthalle (“central market hall”) at the same place.

It was largely rebuilt as a palace a hundred years later and became the family seat of the House of Hohenzollern, rulers of the Kingdom of Prussia and later of the German Empire.