Carmarthen has a strong claim to be the oldest town in Wales – the settlements of Old Carmarthen and New Carmarthen became one borough in 1546. Carmarthen was the most populous borough in Wales in the 16th–18th centuries, described by William Camden as "the chief citie of the country". Growth stagnated by the mid-19th century, as new economic centres developed in the South Wales coalfield.
When Britannia was a Roman province, Carmarthen was the civitas capital of the Demetae tribe, known as Moridunum ("Sea Fort"). It is possibly the oldest town in Wales, recorded by Ptolemy and in the Antonine Itinerary. The Roman fort is believed to date from about AD 75. A Roman coin hoard was found nearby in 2006. Near the fort is one of seven surviving Roman amphitheatres in Britain and only two in Roman Wales (the other being at Isca Augusta, Roman Caerleon). It was excavated in 1968. The arena itself is 50 by 30 yards (about 46 by 27 metres); the cavea (seating area) is 100 by 73 yards (92 by 67 metres). Veprauskas has argued for its identification as the Cair Guorthigirn ("Fort Vortigern") listed by Nennius among the 28 cities of Britain in his History of the Britains.
During the Middle Ages, the settlement was known as Llanteulyddog ('St Teulyddog's) and accounted one of the seven principal sees in Dyfed. The strategic importance of Carmarthen was such that the Norman William fitz Baldwin built a castle there, probably about 1094. The current castle site is known to have been used since 1105. The castle itself was destroyed by Llywelyn the Great in 1215 but rebuilt in 1223, when permission was granted to build a town wall and crenellate the town, making it one of the first medieval walled towns in Wales. In 1405, the town was captured and the castle was sacked by Owain Glyndwr. The Black Book of Carmarthen, written about 1250, is associated with the town's Priory of SS John the Evangelist and Teulyddog.
The Black Death of 1347–49 arrived in Carmarthen through the thriving river trade. It destroyed and devastated villages such as Llanllwch. Local historians site the plague pit for the mass burial of the dead in the graveyard that adjoins the Maes-yr-Ysgol and Llys Model housing at the rear of St Catherine Street.
The ancient Clas church of Llandeulyddog was an independent, pre-Norman religious community which became in 1110 the Benedictine Priory of St Peter, only to be replaced 15 years later by the Augustianian Priory of St John the Evangelist and St Teulyddog. This stood near the river, at what is now Priory Street (51.8601°N 4.2975°W, SN418204). The site is now a scheduled monument.
During the 13th century, Franciscan Friars (Grey Friars, or Friars minor) became established in the town, and by 1284 had their own Friary buildings on Lammas Street (51.855794°N 4.309076°W), on a site now occupied by a shopping centre. The Franciscan emphasis on poverty and simplicity meant the Church was smaller (reportedly "70 to 80 feet long and 30 feet broad" – 21/24 by 9 m) and more austere than the older foundations, but this did not prevent the accumulation of treasures, and it became a much sought after location for burial. In 1456 Edmund Tudor, 1st Earl of Richmond died of plague in Carmarthen, three months before the birth of his son, the future King Henry VII. Edmund was buried in a prominent tomb in the centre of the choir of the Grey Friars Church. Other notable burials were of Rhys ap Thomas and Tudur Aled.
The Friary was dissolved in 1538, and many unsuccessful plans were made for the building. Even before the friars had left, in 1536, William Barlow campaigned to have the cathedral moved into it, from St David's, where the tomb and remains of Edmund Tudor were moved after the Carmarthen buildings were deconsecrated. There were repeated abortive attempts to turn the buildings into a grammar school. Gradually they became ruined, although the church walls were still recognisable in the mid-18th century. By 1900 all the stonework had been stripped away and there were no traces above ground. The site remained undeveloped until the 1980s and 1990s, after extensive archaeological excavations of first the monastic buildings and then the nave and chancel of the church. These confirmed that the former presence of a church, a chapter house and a large cloister, with a smaller cloister and infirmary added subsequently. Over 200 graves were found in the churchyard and 60 around the friars' choir.