It was dedicated to the protomartyr Saint Stephen, whose body had been discovered a few decades before in the Holy Land, and brought to Rome.

[1] Saint Stefano was probably financed by the wealthy Valerius family whose estates covered large parts of the Caelian Hill.

The church was originally commissioned by Pope Leo I (440-461), with the date confirmed by ancient coins and by dendrochronology, which places the wood used in the beams of the roof to around 455 AD, but was not consecrated until after his death.

The original church had three concentric ambulatories flanked by 22 Ionic columns, surrounding the central circular space surmounted by a tambour that is 22 m (72 ft) high and 22 m wide).

In the Middle Ages, Santo Stefano Rotondo was in the charge of the Canons Regular of the Lateran, but as time went on it fell into disrepair.

In the middle of the 15th century, Flavio Biondo (Flavius Blondus) praised the marble columns, marble-covered walls, and cosmatesque works-of-art of the church, but he added that unfortunately "nowadays Santo Stefano Rotondo has no roof".

The entrance has a portico with five arches on tall ancient granite columns with Corinthian capitals, added in the 12th century, by Pope Innocent II.

Each painting has a titulus or inscription explaining the scene and giving the name of the emperor who ordered the execution, as well as a quotation from the Bible.

As a compensation for the loss of the ancient church, Pope Pius VI built a Hungarian chapel in Santo Stefano Rotondo according to the plans of Pietro Camporesi.

Hungarian experts took part in the ongoing restoration and archeological exploration of the church during the 20th century together with German and Italian colleagues.

The floor is composed of coloured marble slabs and was restored in 2006 by an international team led by Zsuzsanna Wierdl.

The remains of Castra Peregrinorum, the barracks of the peregrini, officials detached from provincial armies for special service to the capital, were found under Santo Stefano Rotondo.

The mithraeum belonged to Castra Peregrinorum but it was probably also attended by the soldiers of Cohors V Vigilum, whose barracks stood nearby on the other side of Via della Navicella.