The Franciscan friary that gave Greyfriars its name was dissolved in 1560 during the Scottish Reformation. By 1562 Mary, Queen of Scots had granted its grounds to Edinburgh's town council for use as a burial ground - St Giles' kirkyard was full and unhealthy and could not take any more bodies. Burials began. Within a generation, the graveyard had become the principal cemetery of central Edinburgh, holding writers and philosophers, soldiers and lord provosts, the rich in their walled enclosures and the poor in their unmarked rows. The lands had been part of the city since 1388 under the Tours of Inverleith family; the friars had received them in 1453 or 1458; James III had confirmed their tenure in 1479. The southern and western walls of the friary's grounds were strengthened between 1513 and 1515 to form part of the Flodden Wall, built to defend the city after the disaster at Flodden Field.

On 28 February 1638, the National Covenant was read inside Greyfriars Kirk and then taken outside to be signed. The kirkyard provided the open ground that the kirk's interior could not: hundreds of signatories needing space, witnesses, daylight. The depictions of the moment that show signers leaning on flat table stones are anachronistic - those stones did not yet exist in 1638. People signed on whatever they could brace against. The Covenant rejected Charles I's attempts to impose English-style worship on the Church of Scotland. From this single document came the Bishops' Wars, the Wars of the Three Kingdoms, and decades of bloody Covenanter persecution that lasted into the 1680s, the period Scottish memory still calls the Killing Time.

After the defeat of the Covenanters at the Battle of Bothwell Bridge on 22 June 1679, some 1,200 prisoners were marched to Edinburgh. The prison and the castle could not hold them all. About 400 of them were detained in a field just south of the kirkyard, enclosed on two sides by the Flodden Wall and on a third by the high boundary wall of George Heriot's School. The fourth side was a guarded picket fence facing the kirkyard. The prisoners were held for months in the open through autumn rain and winter cold. Some died there. Some were executed. Some were transported. Some signed bonds of obedience and were released. The area became known as the Covenanters' Prison, and the name stuck even after the city Bedlam was built across most of the site around 1690. A narrow strip remained, converted to enclosed burial vaults around 1700 - this is the form that gives the modern Covenanters' Prison its tomb-lined corridor look today.

Sir George Mackenzie of Rosehaugh was the Lord Advocate who prosecuted Covenanters during the Killing Time. The Italianate domed tomb he was buried in - designed by James Smith and modelled on Bramante's Tempietto di San Pietro in Rome - sits within the very Covenanters' Prison whose prisoners he had condemned. The juxtaposition is deliberate: the jailer interred beside his victims. The tomb has accumulated a vivid local reputation as haunted, and in 2003 two teenage boys, aged seventeen and fifteen, slipped through a ventilation slot at the rear, reached the lower vault, broke open the coffins and stole a skull. Police caught them playing football with it on the grass. They narrowly avoided imprisonment under the rare but still extant charge of violating sepulchres. The vault is now sealed. The Black Mausoleum, as it is sometimes called, is still visited by tour groups - by special arrangement during the day, or at night by joining a City of the Dead tour.

The graveyard's most famous resident is not a human. Greyfriars Bobby was a Skye terrier said to have spent fourteen years guarding the grave of his owner, a man variously identified as a nightwatchman or a shepherd called John Gray, known locally as Auld Jock. The story may have been embellished in nineteenth-century retellings - there is some doubt about which dog was actually involved, and whether the original tale was honest. But it became part of Edinburgh. Bobby's small headstone at the entrance to the kirkyard was erected by the Dog Aid Society in 1981; the consecrated ground means he could not properly be buried inside, and he may rest under a tree just outside the gates. A bronze statue of him sits opposite the graveyard at the junction of George IV Bridge and Candlemaker Row. Tourists rub his nose for luck. The grave of Auld Jock lies thirty metres north of the eastern entrance, the modern stone replacing an unmarked original. A small dog's loyalty has outlasted dozens of lord provosts buried in better tombs nearby.

By the early nineteenth century, Edinburgh Medical College's demand for cadavers had made body snatching a serious local industry. Greyfriars filled with iron cages - mortsafes - leased over fresh graves to keep them protected long enough for the body to decompose past usefulness. Some of these cages still survive in the kirkyard. The wealthier dead were enclosed in walled lairs, mostly along the south edge of the graveyard and in the area now called the Covenanters' Prison. The 1832 Anatomy Act ended the practical need for such defences by legalising the supply of unclaimed bodies. The kirkyard also holds some of Scotland's finest mural monuments from the early seventeenth century, rich in mortality symbolism - the Death Head, the Angel of the Resurrection, the King of Terrors - mostly along the east and west walls of the old burial yard. The Martyrs' Monument commemorates executed Covenanters. The monument to John Byres of Coates, dated 1629, was one of the last works of the royal master mason William Wallace before his death two years later. The dead and the living of Greyfriars sit together still, in stone.