The first written record of the settlement dates back to 1540, when the Polish king Sigismund I passed the charter to the Krakow magnate Jan Tarnowski to build a fortress in Terebovlia county. At the same time, archaeologists found the remains of other settlements of Mesolithic era and Trypillian culture at the vicinity of Ternopil. During the Galicia-Volyn principality there was the settlement of Sopilche (Topilche).

Ternopil had trade routes that contributed to the development of crafts and trade, particularly with Lviv and Russia. In 1548 the city received the Magdeburg rights and in 1550 — the priviledges regarding merchant’s fare and custom’s clearance. In 1566 the first shoemakers’ shop was opened here, and in 1636 — the tailor’s shop (the master worked for 15-16 hours per day). In general, pottery, milling, cooperage were developed, blacksmith’s, metalworker's shop, construction and ceramic shops, small baker’s shops were opened.

The city was severely damaged, particularly its economic growth, by the attacks of Tatars in 1544, 1549, 1575, 1589 (Tatars camp was nearby), 1605, 1618, 1621, 1626 respectively.

Despite this, in the first half of the 17th century, the transit trade became very popular, the relations with Russia, Moldova, Greece, Hungary, and also close cities were improved. After the Union of Brest (1596) the spiritual life of the city also changed- there was an active catolization of its residents. In 1570 the educational fraternity was organized at the parish church, the money for sick and elderly’s hospital was allotted.

In the 17th century the city residents were participants of the liberation struggle (1648-1664), it has become the cause of the nobility’s retalitation. During the attack of the Turkish forces in 1672, the city was badly damaged, particularly it concerned the castle, houses, watermills and dam, the pond was drained, the church was burnt. Afterwards, the first half of the 18th century was a period of the city’s stagnation.

In 1772 Ternopil came under the rule of Austria and became a district city that contributed to the increase of the population, development of the city (wooden, later stone pavements). Alongside the Austrian rule, the German colonization started. German immigrants were granted with various previlidges, such as 10 years of exemption from taxation. German language was heard everywhere, for instance, records management was in German.

From 1810 Ternopil was under the domination of Russia, then from 1815 — again under Austrian rule. In 1832 there was a great fire that burnt almost all wooden houses. The revolutionary spirit of the city in 1830-1840s resulted in the liberation of Ternopil in 1843 (the last holder of the city T. Turkul gave up the rights to the city for the financial compensation), in 1844 Ternopil became a royal city.

In the 19th century the first small manufacturies appeared: metalworker's shops, blacksmith’s shops, shoemaker’s etc, leather, brick and tobacco production. The craft guild started to decline. Local residents were raising livestock, kept bees. In 1848 Ternopil started to prosper. A huge contribution to that was made by the construction of the railway and highways. At the end of the 19th century there were craft shops, small handicraft businesses, mills, breweries, electric power station, distillery, cheese factory.

Since the beginning of the 20th century, Ternopil has been an important centre of the wholesale trade, particularly of alcohol, raw stuff, flour, the retail trade was gowing, credit and banking institutions were opened. Cultural, educational and sports associations such as 'Prosvita', 'Besida', 'Plast', 'Sokil' were operating in the city, in 1918 the government of West Ukrainian People's Republic was there.

In 1922, being already the part of Poland, Ternopil became the center of the voivodeship. There was a pressure on the Ukrainian population, any manifestation of nationalism was limitated. In the interwar period industry was developing at a fast pace, the first Ukrainian factory for the manufacture of paper for smoking and cigarette wrapper was opened. With the coming of the Russian troops, in 1939 Ternopil bacame the regional center. In the 1950’s the restoration of the city began.