This magnificent plaza, facing the river, is the beginning of Lisboa's downtown. It is also known as 'Terreiro do Paço', meaning 'Grounds of the Palace', relating to its function before the Great Earthquake of 1755. The upper floors of the yellow buildings surrounding the square are mainly used as government offices, while the lower floors often contains cafés and restaurants. King Josef I, who ruled during the reconstruction of Lisbon, is seen as a mounted statue in the middle of the square, while the arch facing north is a tribute to the explorer Vasco da Gama.

The Praça do Comércio (Portuguese pronunciation: [ˈpɾasɐ ðu kuˈmɛɾsju]; transl. Commerce Square), more commonly known in Portuguese as Terreiro do Paço ([tɨˈʁɐjɾu ðu ˈpasu] (transl. Palace Yard), is a large, harbour-facing plaza in Portugal's capital, Lisbon, and is one of the largest in Portugal, with an area of 175 by 175 m (574 by 574 ft), that is, 30,600 m2 (329,000 ft2).

Facing the Tagus river to the south, the square hosted Ribeira Palace, the King of Portugal's residence, until the latter was destroyed by the great 1755 Lisbon earthquake. Terreiro do Paço metro station is located beneath the plaza.

After the earthquake, the plaza was completely remodeled as part of the rebuilding of the Pombaline Downtown (Baixa), ordered by Sebastião José de Carvalho e Melo, 1st Marquis of Pombal, who was (chief) Minister of Portugal from 1750 to 1777, during the reign of the Portuguese King José I.

From the 19th century onwards, Praça do Comércio became the seat of some of the most important Portuguese state departments, including the Ministries of Finances, Internal Administration, Agriculture and Maritime Affairs; before the Carnation Revolution (1974) and the creation of a unified Ministry of Defence, it was also the location of the War and Navy Ministries, as well as the old Ministry of Colonies (up to 1967), and thus also became a metonym for the Portuguese central government. Also housed there is the Supreme Court.