In 1405, the King of Hungary Sigismund of Luxembourg granted the city of Tîrgu Mureş (by then named Székelyvásárhely, see Székely) the right to organize fairs; in 1482 King Matthias Corvinus declared the city a royal settlement. It became a municipality in 1616, changing its name to Marosvásárhely, the Romanian equivalent of which is Târgu Mureş (târg and vásár mean "Market" in Romanian and Hungarian respectively). The city received a major boost to its social and economic life when it became home to supreme court of justice of the Principality of Transylvania in 1754.

Avram Iancu, the leader of the 1848 Romanian revolution in Transylvania, was a young lawyer in the city of Tîrgu Mureş before engaging in the fight for the rights of Romanians living in Transylvania.

In 1880 the statue of Bem was inaugurated in Roses Square, at the city's center; in 1893 the statue of Kossuth was as well. The statue of Rákóczi was also inaugurated in 1907. All three were demolished after World War I, in 1923.

The provincial appearance of the city changed greatly in the late 19th century and early 20th century. In 1913, the Transylvanian Secession-style city hall complex was opened, as part of mayor Bernády György's urban renewal. Economic success continued until World War II. After the conflict, together with the rest of Transylvania, Târgu Mureş became part of Romania and was re-named Oşorheiu. From having been an 89% Hungarian-populated city (1910), Romanian population increased throughout the latter half of the 20th century.

From 1940 to 1944, as a consequence of the Second Vienna Award, Târgu Mureş was ceded to Hungary. During this period, a Jewish ghetto was established in the city. It re-entered the Romanian administration at the end of the war in October 1944.

After World War II, the communist administration of Romania conducted a policy of massive industrialization that completely re-shaped the community, and set up a Hungarian Autonomous Province based in the city, which lasted 15 years. Târgu Mureş became the center of economic and social life of the region.

In March 1990, shortly after the Romanian Revolution of 1989 overthrew the communist regime, Târgu Mureş was the stage of violent confrontations between ethnic Hungarians and Romanians (See Ethnic clashes of Târgu Mureş).

As of 2000, a considerable percentage of the population of Târgu Mureş has started to work abroad temporarily. The local economy has started to get stronger after various investors settled in the area.