The capital of the Shetland Islands and the northernmost town of the British Isles, Lerwick is situated on the Mainland of Shetland on a natural harbour sheltered to the east by the island of Bressay. The town lies 222 miles (357 km) from Bergen in Norway, 227 miles (365 km) from Torshavn in the Faroes and 702 miles (1130 km) from Reykjavik in Iceland, yet is 300 miles (483 km) from Edinburgh and 600 miles (965 km) from London. Probably founded by Norsemen, who are known to have gathered a huge fleet here in 1263, Lerwick was largely developed in the early 17th Century by the Dutch as a fishing base. In 1653, Cromwell tried to oust the Dutch and lay claim to the surrounding fishing grounds by landing troops who built Fort Charlotte, the only surviving Cromwellian building in Scotland and the first permanent building in the town. During the 18th and 19th C., Lerwick gradually expanded as a centre of the herring and cod fishing industries and Arctic whaling. Merchants, exporting fish, oil, hides, meat and woollen goods, built waterfront houses with warehouses and piers known as 'lodberries', buildings that are still a feature of the town today. By 1901, it was reckoned that 2000 boats were active in Shetland waters and during two world wars Lerwick's geographical position in the North Sea made it an important and strategic maritime base. During the 1950s there was little industrial activity, but in the 1960s Lerwick became a focal point for the revitalised traditional industries of fishing and knitwear as well as the dynamic new North Sea oil industry. Between 1962 and 1981 the town's population grew from 6000 to a peak of 7500 in association with the development of pipeyards, oil supply depots, and harbour improvements. This brought an acute housing shortage, which remains a problem into the 2010s.

First served by a regular steamer service in 1868, Lerwick is linked to Aberdeen, Kirkwall and Bergen by ferry from the Holmsgarth Ferry Terminal. Smaller ferries from the Esplanade link with Bressay and the Out Skerries.

Notable buildings include the Böd of Gremista (c.1790), Anderson High School (1862), the County Buildings (1875), Lerwick Town Hall (1883), Clickimin Leisure Centre (1985), Shetland Museum and Archives (2007) and the Mareel entertainments complex (2012). Lerwick has two primary schools (Bell's Brae and Sound) and Anderson High School, the largest secondary school in Shetland. Shetland College UHI, a partner in the University of the Highlands and Islands, is also based here. Operational since 1998, Lerwick benefits from one of the first district heating schemes in the UK, supplying business and domestic customers with heat generated from municipal waste. Hot water is circulated through a 19-mile (30-km) long pipe network laid around the town.

Notable sons of Lerwick include shipping tycoon Arthur Anderson (1792 - 1868), politician Norman Lamont (b.1942) and musician Aly Bain (b. 1945). Lerwick is also known for its fire festival, Up-Helly-Aa, held annually on the last Tuesday of January.

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