Cospicua has been inhabited since Neolithic times. Its maritime facilities started during ancient times around the Phoenician era c. 600 BC. Prior to the 18th century it was known as Bormla, a name which is still in use. Its fortification walls, constructed to protect the town and its neighbours Birgu and Isla, were built by the Order of Saint John. Construction began in 1638 but was not completed for another 70 years. In 1722, Grand Master Marc'Antonio Zondadari declared Bormla a city and in view of its strong bastions named it Città Cospicua.

In 1776, the Order of St. John started to construct a dockyard, which was to play a vital role in the development of this city. During British rule in Malta, the Royal Navy made extensive use of the dockyard, particularly during the Crimean War, the First World War and during the years preceding the Second World War. Cospicua, along with the rest of the area around the Grand Harbour, was heavily bombed during this last war as Malta was under siege by the Axis powers.

As Malta became an independent country, the city's dockyard frequently became a bone of contention between the General Workers' Union, to which most of its employees belonged, and successive governments. In the early 21st century the dockyard was substantially downsized under the governance of the Nationalist Party after it was found that the cost of operating the site was responsible for around 25% of Malta's national debt. Plans are now underway for the transformation of an area of the dockyard into a commercial and tourist centre.

Cospicua is also known as Belt l-Immakulata or the City of the Immaculate, referring to the Immaculate Conception or the Virgin Mary, who is the patron of the city. every year a feast is being held on 8 December.