Lisbon, Portugal's Alfama neighbourhood is where it is located. It is Lisbon's oldest and most traditional neighbourhood, and it is currently made up of the parishes of So Miguel, Santo Estêvo, and So Vicente de Fora. It is located across from Bairro Alto and higher than Baixa Pombalina. The Arabic term al-hamma () or probably alfamm, which means baths or fountains, is whence the name Alfama originates.

By going via the Portas do Sol and Santa Luzia overlooks, one can find breathtaking views of Alfama. The hill of the Lisbon Castle of St. George, a castle in outstanding condition that served as a royal palace until the 16th century, climbs up and provides a view of Alfama. At the same location, we can also see the hill of So Vicente. The Cathedral of Lisbon, the Church of Santo Estevao, and the Church of San Vicente de Fora are the area's other major landmarks in addition to the Castle.

Alfama is an odd neighbourhood that resembles a village or hamlet where people regularly greet and interact with one another. Numerous Portuguese and foreign tourists frequent the area, and Alfama is regarded as Lisbon's safest neighbourhood. Alfama is renowned for its dining establishments and Fado clubs as well as for the celebrations of well-liked Saints, particularly on the night of Saint Anthony on June 12 and 13.

After the Swabian and Visigoth presence, the Muslims who had taken the city and would rule it for 400 years constructed the castle walls and fence (later known as Cerca Moura) around the beginning of the 8th century.

Between 711 and 1147 AD, when the city was under Muslim dominion, it could be split into three sections: the castle region, the alcáçova, and the perimeter of the wall.

Alfonso I of Portugal, the country's first king, encircles and captures Lisbon in 1147. The first churches, St. Michael and St. Stephen, were constructed around the end of the 12th century. Between the 12th and 13th centuries, the first church at Santa Luzia was constructed near to the wall at the Portas do Sol.

Under Christian rule, Alfama's borders were extended eastward, within the boundaries of the Cerca Nova, also known as Cerca Fernandina, all the way to the 13th-century Chafariz dos Caballos, or Chafariz de Dentro, which got its name from the two bronze horses that were installed at the water outlets. The intersection of two significant streets in the neighbourhood, the Rua de So Pedro (a market where mariners sold fish) and Rua dos Remedios, was marked by the Largo do Chafariz de Dentro, or the genuine Rossio de Alfama.

Up until quite recently, the fisherman were very significant in the growth of the neighbourhood. The Hermitage of the Remedies, also known as the Hermitage of the Holy Spirit, and a tiny hospital that was linked to it were constructed by the inhabitants of the sea. Escuelas Generales, the location where university students lived until the university was moved to Coimbra in the 16th century, was developed at the tail end of the 12th century.

Muslims, Jews, and Christians coexisted in the mediaeval Alfama. In a small area that currently includes Rua da Judiaria, one of Lisbon's Jewish neighbourhoods was founded. The 1755 earthquake virtually destroyed the quarter. The Pombaline plans had no impact on the reconstruction, preserving the maze-like layout of narrow streets, lanes, and stairways.

Alfama was neglected and degraded throughout the final stages of the Estado novo, and crime in the area steadily rose as a result.

The situation didn't significantly improve after the Carnation Revolution, and in the 1980s of the 20th century it remained one of the city's most troublesome neighbourhoods. The drug trafficking situation was particularly contentious at the time. Alfama didn't start to steadily recover until the middle of the 1990s, and now other historic parts of the city can learn from its success.

The geological map of the Lisbon neighbourhood, which depicts a cluster of healing mineral springs connected to a geological fault that pierces the Miocene layers, validates the origin of Alfama's name. These springs have historically been directed to the numerous chafarices.

Before the Aguas Livres Aqueduct was built, Alfama had the best water supply in all of Lisbon because of this cluster of springs with a large flow. With the construction of a cistern at the site of the former Chafariz da Praia, which gathered water from a steam-powered lift that raised the water to the recently constructed water reservoir of the Veronica, the waters of Alfama or Eastern Waters were first incorporated into Lisbon's public water supply network in 1868. (1862). Overlooking this cistern is the modern Museu do Fado, which is open for tours.

These springs, which can sometimes reach temperatures of over 20 °C, were first used as public baths or thermal waters in the 17th century and continued to be used in this capacity until the early decades of the 20th century. They were finally recognised as medicinal springs at the end of the 19th century.

The spring of the former Tanque das Lavanderas de Alfama was found during repairs. The spring became famous because of its purported therapeutic properties and became known as the Fountain of the Rats. In the early 1960s of the 20th century, shortly before it was shut down due to contamination, this fame reached its historical zenith.