Robert the Bruce granted Edinburgh a new charter in 1329, giving it jurisdiction over the nearby port of Leith, and during the following century the prosperity brought by foreign trade enabled the newly fortified city to establish itself as the permanent capital of Scotland . Under King James IV, the city enjoyed a short but brilliant Renaissance era, which saw not only the construction of a new palace alongside Holyrood Abbey, but also the granting of a royal charter to the College of Surgeons, the earliest in the city's long line of academic and professional bodies.

This period came to an abrupt end in 1513 with the calamitous defeat by the English at the Battle of Flodden , which led to several decades of political instability. In the 1540s, King Henry VIII's attempt to force a royal union with Scotland led to the sack of Edinburgh, prompting the Scots to turn to France: French troops arrived to defend the city, while the young queen Mary was dispatched to Paris as the promised bride of the Dauphin. While the French occupiers succeeded in removing the English threat, they themselves antagonized the locals, who had become increasingly sympathetic to the ideals of the Reformation . When the radical preacher John Knox returned from exile in 1555, he quickly won the city over to his Calvinist message.

James VI's rule saw the foundation of the University of Edinburgh in 1582, but following the Union of the Crowns in 1603 the city was totally upstaged by London: although James promised to visit every three years, it was not until 1617 that he made his only return trip. In 1633 Charles I visited Edinburgh for his coronation, but soon afterwards precipitated a crisis by introducing episcopacy to the Church of Scotland, in the process making Edinburgh a bishopric for the first time. Fifty years of religious turmoil followed, culminating in the triumph of Presbyterianism . Despite these vicissitudes, Edinburgh expanded throughout the seventeenth century and, constrained by its walls, was forced to build both upwards and inwards.

The Union of the Parliaments of 1707 dealt a further blow to Edinburgh's political prestige, though the guaranteed preservation of the national church and the legal and educational systems ensured that it was never relegated to a purely provincial role. On the contrary, it was in the second half of the eighteenth century that Edinburgh achieved the height of its intellectual influence, led by an outstanding group including David Hume and Adam Smith. Around the same time, the city began to expand beyond its medieval boundaries, laying out a New Town , a masterpiece of the Neoclassical style.

Industrialization affected Edinburgh less than any other major city in the nation, and it never lost its white-collar character. Nevertheless, it underwent an enormous urban expansion in the course of the nineteenth century.

In 1947 Edinburgh was chosen to host the great International Festival which served as a symbol of the new peaceful European order; despite some hiccups, it has flourished ever since, in the process helping to make tourism a mainstay of the local economy. In 1975 the city carried out another territorial expansion, moving its boundaries westwards as far as the old burgh of South Queensferry and the Forth Bridges. Four years later, an inconclusive referendum on Scottish devolution delayed Edinburgh's revival of its role as a governmental capital, and Glasgow, previously the poor relation but always a tenacious rival, began to challenge the city's status as a cultural centre.

However, while the 1990s saw Glasgow establish a clear lead in driving Scotland's contemporary arts scene, the decade also marked the return of power and influence to Edinburgh. Following a referendum in 1997, in which Scotland voted resoundingly in favour of re-establishing its own parliament , elections were held in May 1999. On July 1, 1999 the Queen formally opened the parliament, temporarily housed in the twin-towered Church of Scotland Assembly Halls on the Mound. Inevitably, the early years of the parliament have seen petty squabbling mixed with rather dizzying constitutional manoeuvring, but with debates, decisions and demonstrations about crucial aspects of the government of Scotland now taking place in Edinburgh, there has been a notable upturn in the sense of importance of the city. Added to this, recent acquisitions and mergers involving Scotland's two major banks, the Royal Bank of Scotland and the Bank of Scotland, have affirmed Edinburgh's significant place as a financial centre not just in Britain, but also Europe. Meanwhile, construction teams are at work on the parliament building, which will take its place opposite the ancient Palace of Holyroodhouse at the foot of the Royal Mile.