The New Town of Prague was founded in 1348 by King Charles IV. He bought plots of land in advance and resold them further on several conditions. Everyone who bought the land had to begin building a stone house within a month and had to finish the construction in no more than 18 months. Such harsh conditions, however, were sweetened by the fact that everyone who completed them was free from taxes for 12 years. At the same time, the walls were built around the future city. Their construction was completed in just 2 years.

The city was built according to the strict plan. The location of all streets and squares was known in advance. That is why the streets here run parallel and perpendicular to each other. There are a few exceptions though. And those are parts of the New Town that had already existed before its foundation: the surroundings of St. Peter's Church, St. Stephen's Church, and some streets near Vysehrad.

Three squares were supposed to become centers of public life in the New Town: Cattle Market, Horse Market, Hay Market. All these squares exist to this day, however, under new names: Karlova, Wenceslas, and Senovazne Square. It is hard to believe that the sizes of these squares and the width of many streets in New Town have not changed since the 14th century.

New Town was larger than Old Town, Hradcany and Lesser Town combined. After its foundation, Prague became one of the biggest cities in the world. 40 000 people lived here around 1378.