The paper was founded by James Thompson, already proprietor of the Leicester Chronicle which he had merged with the Leicestershire Mercury ten years earlier. The Leicester Daily Mercury would be an evening paper, the first to be published in Leicester, and give extra support to the Liberal Party in the forthcoming general election. The first issue was published on 31 January 1874 from the paper's offices at 3 St Martin's, consisting of four pages of five columns each. The paper had a staff of 25 and a circulation of 5000.
Along with the rest of Britain's regional daily press, the Leicester Mercury has struggled in circulation terms over the past two decades. The paper had an average circulation of 69,069 per day in the first half of 2008, down from 73,634 per day the previous year. This represents a year-on-year decline of some 5.7% and a drop of 47% when compared with a sale of 139,357 copies in the equivalent audit period for 1989.
The newspaper is the sixth largest-selling regional title in England. In 2001, after a re-design and relaunch, it was named Regional Newspaper of the Year. In 2006 the paper attempted to reduce costs by ceasing publication of its localised weekday editions for Loughborough, Hinckley, North West Leicestershire, Melton Mowbray and Market Harborough. They have been replaced with two general editions, covering the east and west of Leicestershire respectively. There are however still two editions published daily to cover the city of Leicester itself. The Mercury has retained its reporting staff in each of the market towns, despite substantial editorial staff cuts in other areas - achieved through non-replacement of departing staff. The company also closed its Sports Mercury edition due to declining readership, and the fact ABC rules no longer permitted the paper to include the sport paper's sales within the circulation figure for the main daily editions. In addition, the paper relaunched its Sporting Blue sports newspaper with tête-bêche binding to cover the city's two major sports teams; Leicester City and Leicester Tigers.
From January 2010 to September 2011 the paper also championed its own youth paper: The Leicester WAVE which appeared as a supplement on the last Wednesday of every month. Its content was entirely written by people under the age of 25, often taking unique angles on some of the Mercury's hard hitting stories by illustrating how they would affect young people. During 2011 it was edited by Sam Newton.