Canal Street was built alongside the construction of the Rochdale Canal, with pubs built to service the users of the canal. In the 1960s, the canals of Northern England declined in usage due to the collapse of the cotton industry. The Canal Street area then began to attract the gay community, who moved into the area from the 1960s. To begin with this was mainly a lesbian-orientated area, but as the years went by it gradually become the focus for gay men. As the confidence of gay people in the UK improved, more and larger bars opened along the canal side, turning Canal Street into the largest gay village in Europe.

In the early 1990s Manto (Manchester Today) bar opened. This was viewed as something of a revolution as Manto had large glass windows, allowing the casual 'passer by' to view what was going on inside. Previously many establishments catering for the gay community were often keen to 'conceal' activities from the general public. As the decade continued more and more establishments began to open, each with their own 'feel'. Manto was briefly renamed as 46 Canal Street; however, the Manto name returned to Canal Street in 2003.

In the late 1990s it was felt by many that Canal Street was becoming too mainstream, represented by the opening of a number of chain bars and the increasing number of 'straight' drinkers. Canal Street has always welcomed all comers, but it was felt by the gay community that the street was becoming too commercialised and losing its original ethos. A boycott was launched of the new Slug and Lettuce bar by the gay community, which eventually led to its closure, when it was bought out and re-opened as Queer. This, along with the re-opening of Manto, is widely seen as the turning point that led to the resurgence of Canal Street.

The street's sign is regularly vandalised by removing the 'C' to read 'Anal Street'. More often than not, the 'C' and the 'S' are both removed, to read 'Anal Treet'.

Red & Wild, annual world AIDS festival - Web site
Manchester Gay Pride - Web site
Manchester Lesbian & Gay Foundation - Web site
Manchester gay rugby team - Web site