This street takes its name from Karnaby House, a large building on the east side of the street, erected in 1683 by Richard Tyler, the bricklayer responsible for the development of the eastern moiety of Six Acre Close, and by Pym, one of his associates. It is not known why the house was so called.

The street was probably laid out in 1685 or 1686 and first appears in the ratebooks in 1687. It was almost completely built up by 1690 with small houses, though there were also a number of stable buildings and a riding-house built on the site of the present Pugh's Place. The most conspicuous element among the early inhabitants were the Huguenot residents and more than one house in the street was noted in the ratebooks as being 'filled with french Protestants', who appear to have lived there rate-free.

Later, from 1700 to about 1721, one of the houses in the street was occupied by the girls' charity school which later moved to Boyle Street and is now the Burlington School, Shepherd's Bush.

All these first houses in Carnaby Street (described by Strype in 1720 as 'ordinary') were rebuilt in the 1720's as part of the redevelopment of the Lowndes property which followed the termination of the original building lease to Tyler and the grant of the freehold reversion of all the eastern moiety of Six Acre Close to William Lowndes in March 1722/3. Despite these large improvements Carnaby Street did not become a place of fashionable residence. The eighteenthcentury inhabitants were undistinguished and in the nineteenth century the houses were nearly all in commercial occupation. A considerable amount of rebuilding took place in 1820–5, after the closure of Carnaby Market, when most of the property which Lord Craven had bought on the east side of the street between Ganton Street and Foubert's Place, was rebuilt by or under the supervision of Thomas Finden.

The south end of the street has now been rebuilt with offices and warehouses in nondescript styles, and the first building of character is on the east side, in the station of the former St. James and Pall Mall Electric Light Company. The southernmost part of this building is the earliest, a curious structure of yellow brick with red dressings, designed in a strange mixture of Victorian Gothic with Baroque details. To the north of Ganton Street on the east side are two much altered houses (Nos. 22 and 23) of early to mid eighteenth-century date, which were evidently not rebuilt after the closure of Carnaby Market; they are both four storeys high and two and three windows wide respectively. The rest of the east side of the street is occupied by two groups of buildings erected as part of the redevelopment of the market in the 1820's. On the west side there are a number of much altered Georgian buildings.

Text extracted from British History Online, a digital library of key printed primary and secondary sources for the history of Britain and Ireland, with a primary focus on the period between 1300 and 1800.
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