Given the favourable economic and social situation, shipyards were also in full swing: all over the city there were squeri (i.e., small family-owned shipyards) supporting commercial activities. In these squeri galleys were produced
which soon came to be known as some of the best of their kind, thanks to the experience gained by Venetian shipyard workers. Timber for these ships came from the woods in the neighbouring mountains, being floated on the Piave, Sila and Brenta rivers.

During the dogate of Ordelafo Falier, the Senate decided to build a big squero under its own control - probably on account of the expansionistic policy resulting from the increase in sea trade. Selecting the location of the new shipyard was all but difficult: it was to be located in an area easy to defend in case of hostile attacks, close to the harbour and the place where timber was collected and stored. The area between S. Peter's church and S. Giovanni in Bragora appeared to meet all the relevant requirements. Thus, in 1105, on both sides of a narrow dockyard, a few building slips were set up. Following the continued growth and expansion of trade, this first Arsenal soon became too small to
meet the increasing demand for ships. In 1304 the first extension of the public squero was therefore completed, in an area to the east of the Old Arsenal on the banks of the so-called St. Daniel's Pond, which trebled the overall surface compared with that of the Old Arsenal. This entailed a thorough re-design of the building based on the experience gained in the first two centuries of activity, so that the Arsenal took on an "industrial" appearance. This is also the time
when Dante Alighieri visited the Arsenal and found it swarming with busy workers (in year 1312).

[Image] An additional expansion was made necessary by the pressing demand for ships during the war with Genua as well as by the conquest of new commercial bases in the Middle East in 1325. On the northern bank of the dockyard in the New Arsenal, 18 additional slips were therefore set up and, for the first time, roofed over in order to allow working even in bad weather. Additional canals were also dug in order to facilitate transit between the two dockyards. The peak in the development of Venice Arsenal was reached, however, in the 1325 to 1600 period, when major works were carried out including tests on the use of guns, the building of new iron-mills as well as of two volti d'acqua (i.e., sheltered canals) on the southern side of the New Dockyard. New, larger dockyards were build at the end of the 15th
century, and special buildings set up for keeping gunpowder (on account of the frequent explosions which had repeatedly damaged both the Arsenal and the neighbouring houses); nevertheless, the Arsenal was unable to meet the demand for ships, so much so that Venetians were obliged to lease ships even in the Netherlands.

A number of factors led to the progressive decline of the Arsenal starting from the 17th century: the obsolescence of galleys, which were being replaced by square-sail ships better capable to cross the oceans, as well as the competition of Dutch merchants and the decrease in trade with northern European countries resulted in a
deep-reaching crisis - as shown by the fact that no additional expansion was undertaken in the Arsenal until the end of the 18th century. There were sporadic periods of febrile activity (in time of war, for instance), but the Arsenal had ceased being the engine of Venice and the Venetian Senate was increasingly in favour of a "land-oriented" policy rather than of seafaring initiatives. Upon the fall of the Venetian Republic, in 1797, the Arsenal was irretrievably damaged by Napoleon's army which purposely destroyed and pillaged many of its structures before leaving the city to its Austrian dominators.

This event gave the final blow to Venice Arsenal, which was basically allowed to become a ruin by the Austrian rulers throughout the first half of the 19th century - preference being given to Trieste as the harbour of the Habsburg Empire.
Following Italy's unification and the 1866 war, Venice Arsenal took up its previous role of major shipbuilding concern - at least in part; the peak in this renaissance was reached during World War I, when a considerable number of warships and submarines were built there. After World War II, the Arsenal was used mainly by the Italian Navy for maintenance activities. It was finally dismantled at the beginning of the '80s when it was decided that it would host non-military installations.