It was formed by filling the ravine created by the Arenal stream and the source of the Fountain of the Canals of the Pear Tree.

[3] In the Middle Ages, a ravine formed by Madrid's Arenal stream served as a natural defensive moat on the edge of the Christian wall, near the Valnadú Gate [es].

[5] After the 1868 Glorious Revolution, the square was called Plaza de Prim, after Juan Prim, although it was popularly known as "Plaza del Barranco" due to the depression formed by the slope of Arenal Street and the Costanilla de los Ángeles [es].

A spring that supplied the primitive medieval "qanats" and as a water source for the royal palace was covered over in 1809.

[8] Between 2008 and 2011, the space underwent a new renovation, which left interesting archaeological remains of the historic Madrid water system [es] on display.