The junction has been a very busy traffic interchange since construction, as it lies at the centre of Theatreland and handles exit traffic from Piccadilly, which Charles Dickens, Jr. described in 1879: "Piccadilly, the great thoroughfare leading from the Haymarket and Regent-street westward to Hyde Park-corner, is the nearest approach to the Parisian boulevard of which London can boast."
The Piccadilly Circus tube station was opened 10 March 1906, on the Bakerloo Line, and on the Piccadilly Line in December of that year. In 1928, the station was extensively rebuilt to handle an increase in traffic.
The intersection's first electric advertisements appeared in 1910, and, from 1923, electric billboards were set up on the facade of the London Pavilion. Traffic lights were first installed on 3 August 1926, at the junction.
At the start of the 1960s, it was determined that the Circus needed to be redeveloped to allow for greater traffic flow. In 1962, Lord Holford presented a plan which would have created a "double-decker" Piccadilly Circus; the upper deck would have been an elevated pedestrian concourse linking the buildings around the perimeter of the Circus, with the lower deck being solely for traffic, most of the ground-level pedestrian areas having been removed to allow for greater vehicle flow. This concept was kept alive throughout the rest of the 1960s.