The fair was one of four important medieval fairs held in Cambridge: Garlic Fair, Reach Fair, Midsummer Fair and Stourbridge Fair.
In 1199, King John granted the Leper Chapel at Steresbrigge in Cambridge dispensation to hold a three-day fair to raise money to support the lepers. The first such fair was held in 1211 around the Feast of the Holy Cross (14 September) on the open land of Stourbridge Common alongside the River Cam.
The fair's location, with the river allowing barges to travel up the Cam from The Wash, and near an important road leading to Newmarket, meant that the fair was accessible to a large population. Despite its proximity to Cambridge, the charter prohibited anyone from imposing taxes on the commerce there.
During its history the fair was variously spelled "Stir-Bitch", "Stirbitch" and "Sturbridge", with its name derived from the "Steer Bridge" (i.e. a bridge for oxen), where the road to Newmarket crosses a small river that enters the Cam just to the east of the common (the name "Sture" or "Stour" now given to this river is a back-formation).
As the fair grew to become the largest in Europe the prosperity of the Leper Chapel was assured, with the position of a priest there among the most lucrative jobs in the Church of England. In the late thirteenth Century the leper colony closed, and the fair was handed over to the town of Cambridge.
As the annual fair became more successful still, the right to control it became the subject of a battle between the town of Cambridge and its well-established University until in 1589 Elizabeth I confirmed the right of the town to collect the fair's profit, but controversially granted the University the right to oversee the organisation of the fair, as well as controlling quality. The once flourishing chapel became merely the store for the stalls, and in the eighteenth century was even used as a pub.
Originally running for only two days, by 1589 the fair lasted from August 24 to September 29, with the 1589 charter stating that it "far surpassed the greatest of and most celebrated fairs of all England; whence great benefits had resulted to the merchants of the whole kingdom, who resorted thereto, and there quickly sold their wares and merchandises to purchasers coming from all parts of the Realm". Holding the fair in September allowed farmers to sell goods in the quiet period between harvest and ploughing, and the fact that it was out of term time meant that University tradesmen could also participate.
In the late eighteenth century, the popularity of the fair began to decline, partly due to the arrival of canals and improved roads leading to the decline in the importance of rivers as a means of navigation. The fair only lasted a fortnight, and the amount of income it generated for the city had fallen. By the nineteenth century, the fair served more as a means of entertainment than being of economic importance, now only a few days in length. As the Victorian town grew, the common became surrounded by poor housing, and the rich visitors became disinclined to visit a potentially dangerous area. The Midsummer Fair, on the other hand, was in a more convenient central location and the Stourbridge Fair fell out of favour.
Stourbridge Fair continued until it was held for the final time in 1933. On this occasion the fair was opened by the Mayor of Cambridge, Florence Keynes (mother of John Maynard Keynes), "in the presence of a couple of women with babies in their arms and an ice-cream barrow." 
The fair was revived in the 21st century, with the 2011 fair to occur on Saturday, 10 September. According to posters observed on the iron fence outside the Leper Chapel 2008 was the fifth instance of the revived Stourbridge fair, suggesting 2004 as the initial year of the fair's revival.
During the seventeenth and eighteenth century, the fair's national status was underlined by writers such as Samuel Pepys and Edward Ward who wrote of the experience. John Bunyan used the event as the inspiration for the Vanity Fair in Pilgrim's Progress, which in turn was used by William Makepeace Thackeray for his most celebrated novel.
During his time at the University in 1665, Isaac Newton visited the fair and is known to have bought a copy of Euclid's Elements which he used to teach himself mathematics. He is also believed to have acquired optical instruments including a pair of prisms - which he used to demonstrate that white light could be split into the colours of the spectrum.
Daniel Defoe visited the fair and wrote at length of it in his Tour through the whole island of Great Britain, stating:
- "this fair, which is not only the greatest in the whole nation, but in the world; nor, if I may believe those who have seen the mall, is the fair at Leipzig in Saxony, the mart at Frankfort-on-the-Main, or the fairs at Nuremberg, or Augsburg, any way to compare to this fair at Stourbridge."
He described the huge variety of merchandise, with stalls including "goldsmiths, toyshops, brasiers, turners, milliners, haberdashers, hatters, mercers, drapers, pewterers, china-warehouses, and in a word all trades that can be named in London."
- "The Festival Theatre, Cambridge", The Independent, January 17, 1995
- Venables, Edmund (1888). The Life of John Bunyan.
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- Cam, Helen M. (1959). "The City of Cambridge : Economic History : Fairs". In Roach, J. P. C. (ed.). Victoria County History of Cambridgeshire, vol. 3. pp. 92–95. ISBN 0-7129-0243-0.
- Gray, Ronald (2000). Cambridge Street Names. Cambridge University Press. p. 17. ISBN 0-521-78956-7.
- "Bunyan - Vanity Fair". stirbitch.com.
- Hall, A. R. (1948). "Sir Isaac Newton's Note-Book, 1661-65". Cambridge Historical Journal 9: 239–250.
- Daniel Defoe (1724). Tour through the whole island of Great Britain, Volume 1, Letter 1.
- "Defoe - Tour through Great Britain: Stourbridge Fair". stirbitch.com.