The new suburb of Pentonville took shape in the last third of the eighteenth century. Pentonville’s chapel of ease was eventually built on Pentonville Road (then called New Road), and large houses and gardens were concentrated near there, including some substantial villas.

Penton Street had grew out of a much-used footpath from Coldbath Fields and Merlin’s Cave, past Dobney’s tea-gardens to the White Conduit House in Islington, four of the best-known attractions locally. When the New Road linked it with the old high street of Islington, it was natural that building should be concentrated in the space between, rather than on the more extensive brickfields and pastures further west. It was naturally fertile ground for shops, tavern-keeping and houses there appealed to minor tradespeople.

Penton Street gained its first terraces in the 1770s, and by the end of the century the new grid of streets to the east. Chapel Street (now Chapel Market), White Lion Street and Baron Street was built up with plain brick terraces.

An anomaly of Chapel Street/Market is that while there is a market there never was a chapel. Chapel Street was so called as early as 1781, long before a single building had been erected. The street itself was in contemplation some years earlier - the 1775 building lease of the Salmon and Compasses on the corner with Penton Street, which refers to an intended street on the south side of the new pub. The name was presumably chosen in anticipation of the building of a chapel of ease on a site ’near Penton Street’, authorised by the Clerkenwell Paving Act of 1777.

A clue to the originally intended site may lie in the naming of Chapel Place, a dead-end on the north side of Chapel Market towards Liverpool Road. A large plot at the top of Chapel Place, extending to Sermon Lane (now part of Tolpuddle Street) was perhaps the place. The name Sermon Lane meanwhile likely refers to open-air preaching site on White Conduit Fields than to a one-time intention to build the chapel of ease here.

Chapel Street was built up from about 1789, the first surviving rating assessment being for 1790, when 21 properties were occupied, four houses were empty and sixteen were in building.

While Chapel Street remained predominantly residential at first, the first food shops and non-retail businesses opened in 1841. Stall holders started to move in during 1844. A man who was repairing the roof at number 26 mentioned a woman that year "who keeps a fruit stall opposite the house from which I fell".

Chapel Street was a commercial artery in a district of spreading poverty and squalor. A house in the street itself was singled out in 1885 "as a fair illustration of many of the dwellings of the poor, not only in Clerkenwell but throughout London".

By 1876 clothes sellers were setting up pitches. Chapel Market has a particular place in the history of British shopping through the opening here in 1882 of the first branch of Sainsbury’s after the original Drury Lane shop in 1869. This was at No. 48, where John James Sainsbury took over a cheesemonger’s shop from Edward Deacock. Marks & Spencer also had an early presence in the area, with a penny bazaar on Liverpool Road from 1914.

In 1936 Islington Borough Council changed the street’s name from Chapel Street to Chapel Market.

Notable Chapel Market pubs include the Agricultural at the extreme east end, that got its name from the historic use of Upper Street as a livestock route south into Smithfield meat market. The Hundred Crows Flying, at the west end of the market is a more modern style pub. In the middle of the market near to the corner of White Lion Street is The Alma Lounge.

The Islington Farmers’ Market relocated to Chapel Market in April 2010 and is held every Sunday at the Penton Street end.

The market now sells fruit, vegetables and fish, as well as cheaper household goods and clothes. It is open every day except Monday, operating in the mornings only on Thursday and Sunday. The market was used for filming street seller scenes in the sitcom ’Only Fools and Horses’.

The street was notable for M. Manze’s, a traditional Pie and Mash shop. Manze’s was based in a building dating from c. 1795. After several years as a fried-fish shop, it was opened by John Antink in 1898 as an eel-pie house. In 1902 he assigned the building to Arthur Lloyd, who in 1905 obtained a new lease. Among the repairs and improvements carried out at this time was the part-rebuilding of the front. Further alterations were made by Lloyd’s widow in 1912. Luigi Manze, a relation of Michele Manze, who began his family’s connection with the London eel, pie and mash trade in 1902, seems to have taken over the shop from Mrs Lloyd that year. The Chapel Market branch closed down in 2019.