This was the Terreiro do Paço, the palace yard, and the royal palace stood on it until the morning of 1 November 1755. That day an earthquake struck, a wave came up the Tagus, and fires burned for days; between them they destroyed the whole lower city. The Marquis of Pombal cleared the ruins and rebuilt the quarter to a single plan, and this square is its river frontage: a symmetrical U of yellow arcaded ministries opening directly onto the water, with a bronze José I on horseback in the middle and a triumphal arch on the north side leading into the grid behind. None of it was accidental. Pombal built it to show that a whole city could be planned on paper first.
The square is meant to be entered from under the arcades, so that the open space and the river arrive together. The Tagus lies along the far edge, with the old quay steps running down into the water and ferries crossing beyond them. The space is wide enough that it feels like part of the estuary rather than a city plaza. The arch at the north end can be climbed, and from the top Rua Augusta runs straight away to the Rossio with the castle hill off to the right, which shows what Pombal did here better than any plaque.