Ancient Romans believed their city had been founded on 21 April 753 BC, and
more recent archaeological discoveries pretty much back this up. According to
myth, the city was founded by the twin sons of Mars, god of war, and Rhea
Silvia, princess and (until meeting Mars) vestal virgin. The twins, Romulus and
Remus, were abandoned on the shores of the Tiber and brought up by a she-wolf.
Romulus killed his brother in a battle over who should govern, then established
the city of Rome on the Palatino.
The non-mythical city was ruled by Etruscan kings until 510 BC, when it became a republic. By the 2nd century BC the city controlled central and southern Italy, had defeated the rival empire of Carthage and was poised to take over the whole Mediterranean. But as Rome became more powerful abroad, its citizens got more uppity at home - the city suffered several civil wars, with the last wrapping up on the Ides of March, 44 BC, when Brutus backstabbed Julius Caesar.
The Republic ended and the emperors took over, ushering in a frenzy of civic and monumental building. Each emperor wanted to leave his mark on the city and in their eagerness to outdo one another, they sprinkled Rome with many of the famous buildings that still stand today. The Empire reached its apogee under Trajan (98-117 AD), spanning the area from northern England to Mesopotamia, north to the River Danube and south down the Nile.
With the rise of Christianity in the 4th century, Rome lost much of its secular power but became the centre of a new empire, Christendom. The Bishop of Rome was named successor to Saint Peter (or, in other words, Pope). Many of the city's large basilicas - such as Santa Croce, Santa Maria Maggiore, San Pietro and San Sebastiano - were built around this time.
In 410, the Barbarian invasions began, but in truth the citizens themselves did more damage, stripping many of the city's fine buildings for their marble. The Western Roman Empire bit the dust in 476 when Odoacer deposed Emperor Romulus Augustulus - from this time on power moved east, and Germanic and Byzantine empires bickered over authority over Rome. In the late 8th century, Pope Stephen II backed up the claims of Frankish king Pepin the Short that he was the chosen of God, and in return received a parcel of land around Rome. The alliance became known as the Holy Roman Empire - combining the power of church and state.
From the 9th to the 12th centuries the power of the popes grew, although it was under constant attack from the city's various aristocratic houses. The papacy splurged its wealth on several new churches dedicated to the Virgin - the Santa Marias of Cosmedin, Trastevere (with its spectacular mosaic), Aracoeli and sopra Minerva. Although things hit the skids a bit in the 14th century, when the pope was exiled to Avingnon due to factional fighting and the city's population and infrastructure took a plummet, the papacy had re-established its firm grip on the reins by the 15th century. Things got lavish. In cahoots with some of Italy's greatest artists - Raphael, Bernini, Borromini - and their cash-stacked patrons - the Medicis, Farneses and Borgheses - the papacy transformed Rome into a wonderland of Renaissance and Baroque piazzas, churches and fountains. Money poured in as pilgrims came from all over Europe to see the wonders of the Holy See. The only real interruption to papal power came in the form of the Roman Commune, whose republican constitution and classical-style senate were instituted during the Roman revolution of 1143.
But as some guy once said, pride goes before a fall: Charles V's sack of Rome in 1527, the French Revolution, Napoleon's march across Europe and the Franco-Prussian War pulled the rug out from under papal power. In 1870 Rome became capital of the newly united Italy, leaving the pope with mere figurehead status and causing him to abandon the city for the home fires of the Vatican.
In the 20th century, Rome went through yet another growth spurt. The pope was made sovereign of Vatican City in 1929. The new administration was more interested in offices and housing blocks than churches, and during the 1930s the city expanded beyond the city walls. During Mussolini's rule, in the 1920s and '30s, Rome took on Fascist airs, puffing out its chest with wide boulevards and overblown architecture. Dreams of imperial glory led Mussolini to form an alliance with Germany during WWII, and the nightmare that ensued helped set the scene for Italy's transformation from a totalitarian regime into a republic in 1946. The postwar years saw Rome expanding physically and becoming the centre of Italy's film industry until the early 1960s.
The 1970s and '80s were marked by more violent transformations, namely those of some radical student groups (who had a long list of complaints about Italy's left-wing governments) into right-wing terrorists. The Brigate Rosse (Red Brigade) was the most notorious group, going so far as to kidnap and eventually murder former prime minister Aldo Moro in Rome in 1978.
The last few decades of the 20th century saw a mixture of economic success and wide-ranging corruption scandals which touched many a politician, public official and businessperson. The public reacted with perverse moral indignation in 1994 by electing a stridently right-wing coalition headed by a billionaire media magnate, Silvio Berlusconi. Amid claims of corruption, the government fell, and after some years of typically Italian political musical chairs, Berlusconi returned from the desert to win the 2001 national elections, promising 'few words and plenty of action'. Despite the landslide victory, his right-wing government's activities have regularly been greeted with large-scale protests. As late as December 2002 he was again under suspicion of corruption, but he seems to have a way with the legal system and may just yet again avoid trouble.
The Jubilee Year in 2000, during which around 16 million Catholic pilgrims visited the city, gave Rome impetus to clean up her act. Billions were spent cleaning church and palazzo facades, improving roads and transport, and reclaiming public spaces from the car parks they'd become. At the start of the new millennium Rome had never looked more beautiful. Meanwhile, Rome proper ostensibly remains, as it has always been, an administrative and tourist centre, without much sign of industry or trade, but lots of political intrigue.