According to tradition, a shrine was first founded here in 616 on a site then known as Thorney Island. It was said to have been miraculously consecrated after a fisherman on the River Thames saw a vision of Saint Peter. While the existence of this shrine is uncertain, the historic abbey was built by Edward the Confessor between 1045-1050 and was consecrated on December 28, 1065. Its construction originated in Edward's failure to keep a vow to go on a pilgrimage; the Pope suggested that he redeem himself by building an abbey.

The original abbey, in the Romanesque Norman style, was built to house Benedictine monks. It was rebuilt in the Gothic style between 1245-1517. The first phase of the rebuilding was organized by Henry III, in Gothic style, as a shrine to honor Edward the Confessor and as a suitably regal setting for Henry's own tomb, under the highest Gothic nave in England. The work was largely finished by the architect Henry Yevele in the reign of King Richard II. Henry VII added a Perpendicular style chapel dedicated to the Virgin Mary in 1503 (known as the Henry VII Lady Chapel).

Although the abbey was seized by Henry VIII during the Dissolution of the Monasteries in 1534, and closed in 1540, becoming a cathedral until 1550, its royal connections saved it from the destruction wrought on most other English abbeys. The expression robbing Peter to pay Paul may arise from this period when money meant for the abbey, which was dedicated to St. Peter, was diverted to the treasury of St. Paul's Cathedral. It suffered damage during the turbulent 1640s, when it was attacked by Puritan iconoclasts, but was again protected by its close ties to the state during the Commonwealth period. Oliver Cromwell was given an elaborate funeral there in 1658, only to be disinterred in January 1661 and posthumously hanged from a nearby gibbet.

The abbey was restored to the Benedictines under Queen Mary, but they were again ejected under Queen Elizabeth I in 1559. In 1579, Elizabeth re-established Westminster as a royal peculiar – a church responsible directly to the sovereign, rather than the Archbishop of Canterbury – and made it the Collegiate Church of St. Peter, the college being Westminster School. Since then, the head has been not a bishop but a dean, appointed by the monarch.

The abbey's two western towers were built between 1722 and 1745 by Sir Christopher Wren and Nicholas Hawksmoor, constructed from Portland stone to an early example of a Gothic Revival design. Further rebuilding and restoration occurred in the 19th century under Sir George Gilbert Scott.

Until the 19th century, Westminster was the third seat of learning in England, after Oxford and Cambridge. It was here that the first third of the King James Bible Old Testament and the last half of the New Testament were translated. The New English Bible was also put together here in the 20th century.