Its name comes from the city of Potsdam as it is located exactly where the old road from Potsdam reached Berlin’s city walls. The railway line that used to cross the square is now operated by U-Bahn and S-Bahn, the two local railway systems. After the city had become the capital of the new German Empire, Potsdamer Platz has developed significantly and new hotels, shops and restaurants were constructed there. It is claimed that in 1882, the first electric street lights in the world were installed at the square by Siemens. By the second half of the 19th Century, the place had become the busiest traffic centre in Europe and a vibrant venue for nightlife. At the end of World War II, the Potsdamer Platz happened to be on the border between the British, American and Soviet sectors and the area had become a point for black market trading. It was badly destroyed by the bombings and its grounds were left idle in the heart of the city. Following the construction of the Berlin Wall, the square was divided in two parts. The fall of the Berlin Wall was marked by a legendary concert of Pink Floyd celebrating the reunification of Germany.

At that time, Potsdamer Platz and its surroundings underwent significant developments and were turned into the largest construction area in Europe. In the period between 1993 and 1998, a new district appeared; it was owned by Daimler Chrysler and included office buildings, hotels, shops, restaurants, a theatre and a casino. The most remarkable buildings that erected on the square were the Debis Tower, designed by Renzo Piano, Sony Centre by Helmut Jahn and the 93 metres high Kohlhof building. The Sony Centre has remained until present day, housing the Sony headquarters and is situated in an imposing monolith building of glass and steel. It is widely considered as one of the finest examples of modern architecture in Berlin and features a film museum, two cinemas and an IMAX cinema, as well as various restaurants. The adjacent Debis-Haus resembles a cathedral with its large dimensions and exposes the machine sculpture 'Meta-Maxi' by Jean Tinguely. At the Kollhoff building you can take the fastest elevator in Europe to reach a panorama platform with stunning views over the city.

Today, the Potsdamer Platz is a vibrant place which is flooded daily by around 70,000 visitors at all times of days and night. It can be easily reached by the railway connections, since there is a large new underground station on the square. The square is a great place for shopping especially at the shopping arcade, as well as for entertainment in the three cinemas. This is where Berlinale (Berlin International Film Festival) is held each year. The area is starting to grow and become not only a tourist attraction, but also a large residential area but, most importantly, one of the liveliest squares in Europe.