Market town or market right is a legal term, originating in the medieval period, for a European settlement that has the right to host markets, distinguishing it from a village and city. A town may be correctly described as a "market town" or as having "market rights", even if it no longer holds a market, provided the legal right to do so still exists.

In pre-19th century England, the majority of the population made their living through agriculture and livestock farming. Most lived where they worked, with relatively few in towns. Therefore, farmers and their wives brought their produce to informal markets held on the grounds of their church after worship. Market towns grew up at centres of local activity and were an important feature of rural life, as some place names remind us: Market Drayton, Market Harborough, Chipping Norton and Chipping Sodbury — chipping was derived from a Saxon verb meaning "to buy".

Market towns often grew up close to fortified places such as castles, to enjoy their protection. Framlingham in Suffolk is a notable example. Markets were located where transport was easiest, such as at a crossroads or close to a river ford. When local railway lines were first built, market towns were given priority to ease the transport of goods. In Calderdale, West Yorkshire, several market towns close together were designated to take advantage of the new trains. The designation of Halifax, Sowerby Bridge, Hebden Bridge and Todmorden illustrate such an example.