It stands instead on the Gyle, also known as the Big River, a watercourse now largely buried beneath the modern street surface. That hidden river shaped the town's early growth and then quietly disappeared from view, leaving a place carrying the memory of water that no longer shows itself.

The town appears to have been an Anglo-Norman creation on what was essentially empty ground. Whether it was Meiler FitzHenry, granted north Kerry by King John around 1200, or John FitzThomas, ancestor of the earls of Desmond, who first laid it out is not known. By 1234 there was clearly something worth fighting over, when "the defeat of Tralee was inflicted by the Galls on the Gaels" in an attack by the Mac Carthaigh and Uí hEidirsceoil. John FitzThomas founded a Dominican friary there in 1243, and by 1286 his grandson Thomas FitzMaurice was granted customs revenue from the town's trade specifically to fund the building of its enclosing walls. A burgage, in medieval towns, was a plot of land held from the lord in exchange for a fixed rent, and by 1298 the burgesses of Tralee were paying 100 shillings annually, suggesting roughly one hundred such plots in existence. The town traded actively enough that in 1375 a Bristol merchant named Henry Peverell was robbed of goods worth 100 marks within it. What followed was a cycle of destruction that makes the survival of any urban fabric at all seem improbable. The earl of Desmond burned the town himself in 1580 before retreating from the advancing Lord Justice Sir William Pelham. A 1584 survey found it "ruined and broken", with buildings, burgages and tenements repeatedly described as "prostrated", "waste", or "broken". Granted to Edward Denny in 1587 as part of the Munster Plantation, it was burned again during the rebellion of the so-called Sugan Earl in 1598 to 1600. In 1641 Confederate Catholic forces besieged the remaining inhabitants in two castles for six months; one survivor, Edward Voakley, later testified that at least one hundred houses were burnt. The Dominican friary was apparently destroyed by Cromwellian forces in 1652, and the town and castle were burned yet again by Jacobite forces in 1691. By 1659, the census recorded a population of just 277 souls. Recovery came slowly under the Denny family in the early seventeenth century, with a new royal charter granted by James I in 1613 establishing a weekly market and yearly fair, and a survey of 1622 recording thirty-two new English households settled there.