There were three Spanish conquistadors named "Francisco de Montejo", "El Adelantado" (father), Francisco de Montejo y León "el Mozo" (son), and Francisco de Montejo "el sobrino" (nephew). Mérida was founded in 1542 by Francisco de Montejo "el Mozo" (son). It was built on the site of the Maya city of T'ho (also known as Ichcaanzihó or "city of the five hills", referring to five pyramids) which had been a center of Mayan culture and activity for centuries. Because of this, many historians consider Mérida the oldest continually occupied city in the Americas.

Carved Maya stones from ancient T'ho were widely used to build the Spanish colonial buildings that are plentiful in downtown Mérida, and are visible, for instance, in the walls of the main cathedral. Much of Mérida's architecture from the colonial period through the 18th century and 19th century is still standing in the centro historico of the city. From colonial times through the mid 19th century, Mérida was a walled city intended to protect the Peninsular and Criollo residents from periodic revolts by the indigenous Maya. Several of the old Spanish city gates survive, but modern Mérida has expanded well beyond the old city walls.

Late in the 19th century and the early 20th Century, the area surrounding Mérida prospered from the production of henequén. For a brief period, around the turn of the 20th century, Mérida was said to house more millionaires than any other city in the world. The result of this concentration of wealth can still be seen today. Many large and elaborate homes still line the main avenue of Paseo de Montejo, though few are occupied today by individual families. Many of these homes have been restored and now serve as office buildings for banks and insurance companies.

Mérida has one of the largest centro historico districts in the Americas (surpassed only by Mexico City and Havana, Cuba). Colonial homes line the city streets to this day, in various states of disrepair and renovation; the historical center of Mérida is currently undergoing a minor renaissance as more and more people are moving into the old buildings and reviving their former glory.

In August 1993 Pope John Paul II visited the city on his third trip to Mexico. The city has been host to two bilateral United States – Mexico conferences, the first in 1999 (Bill Clinton – Vincente Fox) and the second in 2007 (George W. Bush – Felipe Calderón).

In June 2007, Mérida moved its city museum to the renovated Post Office building next to the downtown market. The Museum of the City of Mérida houses important artifacts from the city's history, as well as an art gallery.

Mérida is the cultural and financial capital of the Yucatán Peninsula, as well as the capital city of the state of Yucatán. In recent years, two important science competitions were held in Mérida: the 2005 International Mathematical Olympiad and the 2006 International Olympiad in Informatics. In 2006 Mérida hosted the FITA Archery World Cup Final. Mérida also hosted the International Cosmic Ray Conference between 3–11 July 2007. The 40th International Physics Olympiad, IPhO 2009, was held in Merida, Yucatan, Mexico, from July 12 to 19, 2009.

As the state and regional capital, Mérida is a cultural center, featuring multiple museums, art galleries, restaurants, movie theatres and shops. Mérida retains an abundance of beautiful colonial buildings and is a vibrant cultural center with music and dancing playing an important part in day-to-day life. At the same time it is a modern city boasting a comprehensive range of shopping malls, auto dealerships, top quality hotels, restaurants and leisure facilities. The famous avenue, Paseo de Montejo, is lined with original sculpture. Each year, the MACAY Museum in Mérida mounts a new sculpture installation, featuring works from Mexico and one other chosen country. Each exhibit remains for ten months of the year. In 2007, sculptures on Paseo de Montejo feature works by artists from Mexico and Japan.

Mérida and the state of Yucatán have traditionally been isolated from the rest of the country by geography, creating a unique culture. The conquistadors found the Mayan culture to be incredibly resilient, and their attempts to eradicate Mayan tradition, religion and culture had only moderate success. The surviving remnants of the Mayan culture can be seen every day, in speech, dress, and in both written and oral histories. It is especially apparent in holidays like Hanal Pixan, a Mayan/Catholic Day of the Dead celebration. It falls on November 1 and 2 (one day for adults, and one for children) and is commemorated by elaborate altars dedicated to dead relatives. It is a compromise between the two religions with crucifixes mingled with skull decorations and food sacrifices/offerings. Múkbil pollo is the Mayan tamal pie offered to the dead on All Saints' Day, traditionally accompanied by a cup of hot chocolate. Many Yucatecans enjoying eating this on and around the Day of Dead. And, while complicated to make, they can be purchased and even shipped via air. (Muk-bil literally means "to put in the ground" or to cook in a pib, an underground oven).

For English speakers or would-be speakers, Mérida has the Mérida English Library, a lending library with an extensive collection of English books, videos, tapes and children's books. The library is also the site for expatriate meetings, children's storytelling hours and other cultural events.

Mérida is also home to the Yucatan Symphony Orchestra, which plays regular seasons at the Jose Peon Contreras Theatre on Calle 60 and features classical music, jazz and opera.

Weather
Merida features a tropical wet and dry climate. The city lies in the trade wind belt close to the Tropic of Cancer, with the prevailing wind from the east. Mérida's climate is hot and humidity is moderate to high, depending on the time of year. The average annual high temperature is 33 °C (91 °F), ranging from 28 °C (82 °F) in January to 36 °C (97 °F) in May, but temperatures often rise above 38 °C (100 °F) in the afternoon in this time. Low temperatures range between 18 °C (64 °F) in January to 23 °C (73 °F) in May and June. It is most often a few degrees hotter in Mérida than coastal areas due to its inland location and low elevation. The rainy season runs from June through October, associated with the Mexican monsoon which draws warm, moist air landward. Easterly waves and tropical storms also affect the area during this season.