Nine miles from the border with Wales, Shrewsbury was established on high ground within a loop of the River Severn, which made the site of the town a peninsula. Though perhaps not heavily or continuously occupied during the early Saxon period – nearby Atcham being suspected as a royal base then – it had become a royal centre of regional administration by, and probably well before, the tenth century, able to be described in 901 even as a civitas by its contemporaries, although this rise to prominence may have been recent, as in 894 the marauding Danes had proceeded up the Severn without sign of any fortification to counter them, and the vulnerability of Atcham may have been what prompted the conversion of Shrewsbury to a burh, conceivably as early as 901 – an early date might explain the lack of reference to Shrewsbury in a later Mercian list of burh-building activities of Ethelred and Æthelflæd. It would be again accorded city rank in Domesday, despite not having a cathedral (though there were several churches), while the town and its surrounds had the status of a hundred – some manors flanking or overlapping the town boundaries either had tenants with burgess status or incorporated some of the burgages themselves. The detail in Shrewsbury's Domesday entry is also testimony to its importance. The 252 houses held by the king's burgesses in the time of Edward the Confessor (plus 49 burgesses of external manors or religious houses) makes it a relatively large town by the standards of those times, although the community had suffered damage from the Norman capture of the town and subsequent imposition of a castle and French colony to secure Norman mastery.

Shrewsbury was, furthermore, a leading bulwark along the border, perhaps originally established – on little inhabited scrub-land, as its name implies – as a burh controlling river crossing points on the route between Hereford and Chester. It was designated as the capital of the shire in 1006. The presence of a royal mint (from Athelstan's reign) testifies to its importance as a centre for trade in the same period, and we may infer a market from both Domesday and earlier evidence. Three of the churches, and probably the earliest market, lay on the northernmost of two areas of high ground encompassed by the Severn loop, while the older and senior ecclesiastical foundation (St. Chad's) lay on the southern hill, the two hills separated by a boggy valley at each of whose ends lay a ford, and later a bridge, across the river. Because the river constrained expansion, the French colony was established, as a planned suburb that became known as Frankeville, on the far side of the river just beyond the western crossing; Doncaster (Yorks.) similarly saw, soon after the Conquest, the plantation of a group of French settlers, west of the castle and immediately south of the river crossing, this neighbourhood acquiring the name French Gate, while the Frenchgate burgage unit at Richmond (Yorks.) was also a planned suburb, between castle-town and river. In fact, even the better-known Norman colony at Norwich – described by Domesday as a novus burgus but given no name other than the Franci de Norwic of the sub-heading for that part of the text – was also, strictly speaking, a suburban extension of the Saxon borough; while not close to the river, the choice of its site may too have been influenced by the presence of an important secondary watercourse, although perhaps more by its adjacency to the castle.

Quaysides developed beside the Shrewsbury river crossing and along the eastern stretch of the river-loop. The Severn and its tributaries provided access into mid-Wales and to the port of Bristol, while to the south-east began a route through the Midlands to London. Shrewsbury's strategic importance was evident to the Normans, who put up a wooden tower soon after the Conquest; it was destroyed a few years later by rebels, who also did much damage to the town. With the looping river providing a natural defence for much of the town, Earl Roger de Montgomery, who held the city of the king, erected a stronger castle (1074) on a point guarding the only land route onto the site; he also founded an abbey on the far side of the western arm of the river (1083).

After Shrewsbury reverted into the king's hands, following the forfeiture of the rebellious Robert de Bellesme, Henry I granted recognition of its borough liberties, customs, and exemptions – some of which had been imported from Breteuil; according to the confirmation by King John; the castle became the base for the sheriffs: Richard de Belmeis, Pain Fitz-John, William I Fitz-Alan and their successors, who personally or whose families were active in developing the market network of the region. Shrewsbury's continuing importance as a military and commercial centre in the centuries that followed made it one of the more prosperous English towns. The leather industry, the flourishing trade in wool and flax of the region, and the cloth-finishing industry developed at Shrewsbury were the mainstays of the urban economy in the Middle Ages; unfinished cloth woven in Wales was bought, primarily through Oswestry's market, and then fulled and dyed at Shrewsbury, with much of the finished product being shipped off to London. Although a merchant gild did not receive official authorization until the royal charter of 1227, gild records have survived from the early thirteenth century and do not suggest that it was new then. A membership roll, whose compilation was begun at the time when the gild was authorized, though calling on older records, has over three hundred names, reflecting the breadth of application of 'merchant' at that period; it included not only Shrewsbury traders and artisans but some outsiders.

Shrewsbury needed no licence for its long-established central market, and consequently we have no documentary reference to it until a charter of King John (1204) granted the leper hospital of St. Giles, located outside the town, two handfuls of corn and one handful of flour from every sack of such goods exposed for sale in the marketplace. This, known as the King's Market, was probably originally (and certainly by mid-twelfth century) held in an area either between or (at least partly) within the churchyards of St. Alkmund's and St. Juliana's, two adjacent Anglo-Saxon churches; as the volume of trade increased, market activity spilled out into nearby streets, within an area of the town that may well have been the original nucleus of settlement and the location of the burh (so far unconfirmed by archaeology). The area between the two churches was a rather small space – some of it already lost by 1246 to stalls that had been upgraded to more permanent fixtures – with boggy ground on one side, and little appeal as a residential area to the wealthier traders of the town.

Although a solution to the problems posed by this early marketplace may have been desired by at least the leading townsmen, on the surface it was a complaint from one or both of the adjacent churches that was framed as the rationale for the king ordering the sheriff, in 1261, to have the market moved to the High Street, known then as Gombestole Street (a name that might itself be interpreted as related to market activities). In its entirety the High Street effectively ran the length of the town, connecting the two areas of higher ground, and terminating at the castle; different stretches acquired various names over the course of the Middle Ages. Gombestole Street is suspected of having been a partially planned area of rectilinear plots ranged along the south side of a street that may have been widened at some point. In the event, the new marketplace was established not in the street per se, but in The Square, actually an irregularly-shaped area – created by clearing several tenement plots – off the south side of the street. This would henceforth serve as the market for grain and other agricultural produce, though some marketing continued to take place along major streets, particularly as shops proliferated; we hear for example of Butchers Row, Cordwainers Row, and Cooks Row, which seem to have been clusters of businesses each ranged along part of a single side of one or other of the streets.

In addition to overseeing the transfer of the King's Market, the sheriff was also to have public proclamation made of the change, and to ensure public behaviour complied with the relocation. It is conceivable that the king's motivation to assure Shrewsbury a higher-capacity marketplace was part of a larger plan to make it a better base of operations, whether offensive or defensive, against the Welsh; just a few years earlier he had granted two charters to Shrewsbury: one giving more independence to local authorities, and the other protecting the town's traders from seizure of their goods as compensation for the debts of others. From the perspective of the urban leaders, the new location for the market would allow it to be better supervised and regulated; they had a guildhall, or booth-hall, constructed in 1275 along the High Street frontage of the market square. Paving of the marketplace was going on for several weeks during the same year, with a team of up to four pavers and four assistants working on that component of the project. The king had in 1268 authorized a special toll to be levied on grain for three years, to fund pavage, and ballival accounts for 1270 show that paving of the High Street began in that year, though paving the marketplace was evidently deferred until the footprint of the guildhall could be ascertained.

The earliest fair – the oldest reliably documented in Shropshire – was a grant to Shrewsbury Abbey, known from Stephen's confirmation (1138/39) of a grant of Henry I; the monks claimed their abbey's founder, Roger de Montgomery, had granted the right to a fair and they produced a charter of William II confirming it, but this may be a twelfth-century forgery. Henry II was content to follow up Stephen's confirmation with his own, but the fair was a bone of contention with the burgesses, who objected to it pre-empting their own commercial activities for several days. The burgesses acquired their own fair grant in 1205 and a second in 1267. Perhaps more valuable to them was the virtual monopoly granted the burgesses, by charter of 1209, on buying raw hides and wool in the county.

A range of trade-related disputes between the borough and other authorities, illustrating different facets of competition, is revealed by the proceedings of the Shropshire eyre of 1221. The burgesses of Bridgnorth complained that their Shrewsbury counterparts had begun blocking them from buying untanned hides or undyed cloth in Shrewsbury. The Shrewsbury burgesses objected to the Abbot of Lilleshall collecting tolls on commercial traffic crossing a bridge he had built across the Severn, at Atcham. The abbot's defence was that it was essentially pontage, to defray the construction costs; a jury's verdict, however, was that he and his predecessor had been levying the toll for twenty years but had failed to complete the bridge. The abbot in his turn complained that Shrewsbury's bailiffs had made a public proclamation that no-one in the town should sell anything to him or his tenants; the defendants denied, and the abbot later withdrew his charge, but the bad blood is evident. The burgesses further complained about their own abbot that he had deprived them of an evechepyng – a special 'market', as they described it, held between noon and vespers the day prior to commencement of the 1st August fair claimed by the abbey. The abbot defended that he, not the burgesses, owned that event, though even Henry III's grant of 1227 extending the fair did not have it starting until vespers was rung on September 30.

It seems likely the burgesses did not win their case, for they refused to put it to a jury, and in the 1230s a settlement was reached between them and the abbot: the burgesses would not block access through the town for visitors to the fair after the ninth hour on September 30, while the abbot agreed that on any goods bought inside Shrewsbury during the fair, tolls would be payable to the borough. Later in the century the burgesses leased the evechepyng to the abbey for 40s., reduced to 38s. in 1296; two years later the burgesses agreed not to open their shops during the fair, not to sell anything within the town except ale and wine, and not to levy murage or pavage on goods bound for, or bought at, the fair; in return the abbot acknowledged that the burgesses could distrain on the abbey for payment of the 38s.

In 1228 it was alleged that John Fitz-Alan's fair at Oswestry, freshly licensed, would be detrimental to the fair at Montgomery, a royal manor across the Welsh border, in which a planned market town was established in conjunction with construction of a castle in the 1220s, and promoted to borough status by charter of 1227, which also granted a monopoly on trade to members of the merchant gild; both fairs took place in November. Shrewsbury – severely damaged by an assault of Llewellyn the Great in 1212, captured by him in 1215, and at risk in 1223 when open war broke out once more – received much the same chartered rights around the same time, and defensive walls were under construction to encircle the town. The complaint continued that the established Thursday market at Oswestry was clearly harmful to the markets of Shrewsbury and Montgomery (the latter also held on Thursdays). Who made the allegations is not indicated, but the Oswestry fair had not even had a chance to take place, so the complaint must have come from someone up-to-date with what was going on at court and with a duty to be pro-active in protecting the king's interests – possibly the sheriff Henry de Audley, who was issued with an authorization to shut down the Oswestry institutions. Montgomery's fair had a licence (1224), and its market grant was part of its 1227 charter, whereas Oswestry's market, though older, had no licence. Fitz-Alan must have recognized that he would be unlikely to win if he defended his market in court, so he obtained a licence for it on a different day, though it is less clear what he did about the fair.

Shrewsbury, however, remained unsatisfied and in 1233 the complaint resurfaced that its toll revenues were diminished by Oswestry's commerce. The fair licence obtained by Shrewsbury's burgesses in 1267 was also for a November event, to be held within a week following that at Oswestry, whose licence had been renewed in 1253. Whether this prompted a complaint from Oswestry we do not know, but in 1309 the leaders of the Shrewsbury community obtained a July fair in place of the November one, switching again in 1327 to September.