The present day buildings of Exchange Flags date from 1939 but trading activity in the area can be dated back to the thirteenth century.

The memorial to Horatio Nelson at the centre of The Flags was unveiled in 1813 and is acknowledged as Liverpool's first major public sculpture. The bronze castings of four prisoners represent French sailors in torment at Nelson's four greatest triumphs. Thousands of French sailors were held in the city as prisoners of war during the Napoleonic Wars.

In 1941, in a move instigated by Winston Churchill, the headquarters of Central Operations was moved from Plymouth to Exchange Flags. A secure bomb and gas proof 'Fortress' containing 100 rooms and covering 50,000sqft was created in what is now known as Walker House. From this complex the combined services controlled the Western Approaches, plotting the positions of convoys and the hunter submarines on huge wall maps. An ENIGMA decoding machine was used to crack the codes that would help to ensure the safe passage of convoys across the Atlantic.

The two main buildings on Exchange Flags were subsequently renamed in honour of two of the heroes of that time: Sir Max Horton was Commander-in-chief of Western Approaches and Captain 'Johnny' Walker sank more U-Boats than any other commander.