At the beginning of the 12th century, the French kings of the Capetian dynasty controlled little more than Paris and the surrounding region, but they did their best to build up Paris as the political, economic, religious and cultural capital of France. The distinctive character of the city's districts continued to emerge at this time. The Île de la Cité was the site of the royal palace, and construction of the new Cathedral of Notre-Dame de Paris began in 1163.

The Left Bank (south of the Seine) was the site of the new University of Paris established by the Church and royal court to train scholars in theology, mathematics and law, and the two great monasteries of Paris: the Abbey of Saint-Germain-des-Prés and the Abbey of Saint Geneviève. The Right Bank (north of the Seine) became the centre of commerce and finance, where the port, the central market, workshops and the houses of merchants were located. A league of merchants, the Hanse parisienne, was established and quickly became a powerful force in the city's affairs.