The town of Turku in south-western Finland, founded around 1300, is the oldest urban settlement in the country. The emergence of Turku has mostly been explained as the result of the actions of two institutions, the church and the crown, while economic and social aspects of urbanisation have received less attention. In this article, we create a socio-economic model and apply it to characterise and explain the shift from the region’s pre-urban centre of Koroinen to the medieval town. We trace the impact of the medieval commercial revolution on the Turku area and describe how it transformed social and economic structures before and during the emergence of the town. This brings out the particularities of northern urbanisation in the Middle Ages. The importance of commodity production seems to increase in Finland from the 10th century onwards, affecting not only settlement patterns in the coastal areas but also the dynamics of wilderness exploitation. However, it was the emergence of the Hanseatic League in the 13th century that turned out to be decisive for the founding of Turku. It launched a migration of German merchants, bringing along new understanding of urbanised economy along with novel standards for trade practices and infrastructure.