Downtown Disney began life on March 22, 1975, as the Lake Buena Vista Shopping Village, a shopping complex intended to serve the planned residences within Walt Disney World property. As the residential units evolved into more resort hotel space, the complex became more focused as a shopping destination for all Walt Disney World visitors, and renamed Walt Disney World Village in 1977. With the advent of new management under Michael Eisner in the mid-1980s, Disney began looking for ways to keep vacationers on Walt Disney World property longer, and entice them with offerings to prevent them from leaving for entertainment beyond Disney's borders.

To compete with the popular Church Street Station clubs in downtown Orlando, Pleasure Island was announced on July 21, 1986, as an expansion to the Village for highly themed, adults-only nightlife. Construction began the following August, and Pleasure Island opened on May 1, 1989, (the exact same day as the Disney-MGM Studios theme park) featuring unique clubs with the Disney touch for quality and creativity. That same year, the Walt Disney World Village was once again renamed as the Disney Village Marketplace to reflect the ever-changing nature of the area.

In the mid-1990s, the growth of Walt Disney World once again created the potential for expansion of the offerings around Village Lake at Pleasure Island and the Disney Village Marketplace, so on June 20, 1995, major enhancements and expansion were announced for the area. The Disney Village Marketplace and Pleasure Island would be folded into a newly-branded district called Downtown Disney, with the former renamed one more time on September 7, 1997, as Downtown Disney Marketplace.

Just a few days later, on September 15, Downtown Disney West Side opened as a third shopping, dining, and entertainment zone featuring more eclectic venues such as La Nouba (a permanent show which is part of Cirque du Soleil), DisneyQuest, and Virgin Megastore. Major changes for the complex also included the conversion of the somewhat sedate Mickey's Character Shop into the bustling World of Disney, becoming the world's largest Disney store, and the expansion and upgrade of the AMC Pleasure Island Theatres.