According to the legend, the Apostle St. James spent some time preaching in Spain. He then returned to Palestine where he was captured and tortured to death by Herod Agrippa. His disciples secretly put his dead body on a boat which the sea took to the Spanish shore, and it was buried in a remote place in the forest. In 813, Bishop Teodomiro was told about a star shining in the place where the Apostle was buried (hence the name Compostela - in Latin, campus stellae, or 'field of the star'), the bishop ordered an investigation and the tomb was discovered. The place soon became a pilgrimage site, believers from all over Europe flocked there seeking absolution for their sins. The route was marked with shells, the symbol of St. James, and the pilgrims wore that symbol on their clothes. The Moors demolished the shrine but respected the relics. In the 11th Century, the Romanesque cathedral was built, with some later Baroque additions.

The pilgrims approached the cathedral through a gate called Puerta del Paradiso ('paradise gate') in present-day Azabacheria square. Those who walk the Way of Saint James today, will climb a flight of steps flanked by sculptures of David and Solomon to the elaborate wrought-iron gates. A golden shell adorns the altar, and people stand in queue to kiss it. The Chapel of the Reliquary contains a 9th-century gold crucifix which reportedly contains a piece of the True Cross.

The central Obradoiro ('work of gold') Square is surrounded by remarkable works of architecture. Opposite the Cathedral stands the Gelmirez Palace, a fine Romanesque building with beautiful arches and sculptures. The 15th-century Hospital Real was built by the Catholic King and Queen as a shelter for the numerous pilgrims. It is a fine example of the Plateresque style. The elegant Rajoy Palace was built in the 18th Century is Neoclassical style.

The cathedral's only original Romanesque façade with a spectacular Gothic gate can be seen from the neighbouring Platerias square, named so after the numerous silversmith shops under its arcades. A beautiful 19th-century fountain, Fuente de los Caballos, rises in the centre of the square.