In the mid-1800s, Liberty village was a very industrial area of Toronto. Many factories and industrial building were built here as well as two prisons, the Central Prison and the Mercer Reformatory for Women. In fact, the neighbourhood gets it name because when prisoners were released from these prisons, they would step out onto the main street in this area that they had named "Liberty Street‘’.

In the 1980s and 1990s, Liberty Village underwent through a massive period of revitalization. Many of the old, red brick, Victorian-style factories were converted into lofts, offices and retail spaces. Many young artists moved here and several television and film production companies, design studios and Web 2.0 start-ups opened offices here as well. Soon, new restaurants, cafes and bars popped up in Liberty Village as well as many retail shops. Today, Liberty Village is a conveniently located and trendy Toronto neighbourhood in which to live.