The town was founded in 1912. It was created by the initiative of the Canadian Northern Railway. Its plan was to build an ideal city, a new town, at the foot of the mountain. The company bought 4,800 acres of farm-land, and then built a rail tunnel under Mount Royal connecting their land to downtown Montreal.
The town was designed by Canadian Northern's chief engineer, Henry Wicksteed. The layout was based on that of Washington, DC. Two main thoroughfares, Laird Boulevard and Graham Boulevard, cut across diagonally and meet at Connaught Park, a green space located in the centre of town. Mount Royal Train Station (Gare Mont-Royal) is located adjacent to this park, a commuter train station on the AMT's Montreal/Deux-Montagnes line.
The community is still commonly referred to as the Town of Mount Royal, even though it is now a borough of the City of Montreal.