Almost immediately after the end of the Polish-Ukrainian fighting for the city in 1918, the idea was put forward to establish a separate section in the Lychakiv Cemetery for the Polish defenders of Lviv. The city council allocated part of the land on the slope of the hill for this purpose, and it was there that the burial of the fallen began as early as November and December 1918. The number of graves increased as bodies were exhumed from graves scattered around the city. In the summer of 1919, Bishop W. Bandurski, suffragan of Lviv, consecrated the site of the future cemetery.

In the early 1920s, the original idea was changed and it was decided that the cemetery under construction was to be dedicated to all soldiers who had fallen in the battles for the Eastern Borderlands - both in battles against the Ukrainians and against the Russians. It was also decided that all participants of these battles, who died later, would be buried in the Cemetery of the Defenders of Lviv. In this way, General Waclaw Iwaszkiewicz (it was under his command that the Polish forces pushed the Ukrainians out of the Lviv region and the Southern Borderlands), General Tadeusz Rozwadowski, General Jan Prawdzic-Thullie and the former commander of the city defence, Czeslaw Mączyński, later to become a colonel, found their final resting place here. Also buried in the cemetery were its designer, architect Rudolf Indruch, as well as the deputy mayor of Lviv, Dr. Leonard Stahl, and the Metropolitan of Lviv of the Armenian rite, Archbishop Jozef Teofil Teodorowicz (in the 1970s his remains were secretly transferred to Lychakiv Cemetery - his reburial in the original place took place on 24.June 2011 after many years of efforts), Fr Gerard Szmyd (his remains, like those of Archbishop Teodorowicz, were secretly transferred to Lychakiv Cemetery, and in 2014 they were reburied at Orląt Cemetery).
In 1920 a monument was erected in the cemetery on the grave of 5 soldiers killed on 17.08.1920 in battle with Budionny's army near Zadwórze, in 1923 the remains of Lviv defenders killed in Rzesna Polska were transferred to the cemetery, and in 1928 a monument was erected on the grave of legionaries killed on 15.02.1918 near Rarańcza.

Fundraising for the construction of the necropolis was handled by a specially formed Society "Guarding the Graves of Polish Heroes". In 1921, a competition was announced for a project of a comprehensive cemetery arrangement. The winning design was that of Rudolf Indruch (1892-1927), a fifth-year architecture student at Lviv's Technical University, who designed a true national pantheon, taking advantage of the natural slope of the terrain. A chapel stood at the highest point, and below it catacombs, a field with graves and an Arch of Glory with concentrically descending tombstones. The inscription on the Arch reads: 'Morturi sunt, ut liberi vivamus [They fell so that we might live in freedom]'. At the foot of the Arch stood two stone lions holding shields with the inscriptions "Always faithful" and "Tobie Polsko".

Work on the cemetery progressed in stages. It was not until October 1932 that the catacombs were completed, and the Arch of Glory, consisting of 12 columns, was ceremonially unveiled on Independence Day, 11.11.1934. Under the Arch, 5 unknown soldiers from the Persenkovka battlefield were buried in a common grave. On the wings of the catacombs, memorials were erected to foreign volunteers (French and Americans) who had died in the battle for Poland against the Bolsheviks. In 1924, the chapel was completed under the direction of architect Kazimierz Weiss. The chapel had a statue of the Virgin Mary and Child Jesus on the altar - a sculpture chiseled by the well-known artist Luna Drexlerówna. The chapel was consecrated on 28.09.1925 by Archbishop Bolesław Twardowski.

The right pylon of the Arch of Glory (looking from inside the cemetery towards Pohulanka) bears the names of the places of the bloody clashes during the city's defence: Vulka, Kadecka School, Kozielniki, Persenkówka, Cytadela-Poczta, Kościuszko Garden, Railway Headquarters, Mount of Execution, Żółkiewskie, Zamarstynów-Kleparów, Bem Barracks, Central Railway Station, Sienkiewicz School, Kulparków-Sokolniki, Zimna Woda - Rzęsna. The left pylon bears the names of the towns and villages in eastern Lesser Poland which were notable for their struggle for restoration to the Motherland: Vinniki, Pasieki-Zubrza, Brzuchowice, Grzybowice Wielkie, Dublany-Malechów, Zaszków-Kulików, Żółtańce-Jaryczów, Laszki-Zadwórze, Kurowice-Mikołajów-Przemyślany, Gołogóry-Złoczów, Wołków-Cecowa, Zborów-Olejów, Załoźce-Jezierna, Tarnopol-Zbaraż.

In 19125, one of the nameless graves in the Lviv Defenders Cemetery was exhumed and the exhumed remains were transferred to the Tomb of the Unknown Soldier in Warsaw. The exhumed grave was initially marked by a wooden cross with a plaque attached. In 1925, the site was covered with a sandstone slab designed by Józef Starzyński.

Due to the outbreak of World War II, the construction of the entrance gate from the Pohulanka side, which was to be topped with a sculpture of an eagle hugging chicks, was not started.

By 31.08.1939, a total of 2859 soldiers were buried in the Cemetery of Eaglets, of whom nearly 23% were young people under the age of 18 (among them 13-year-old Antoś Petrykiewicz, the youngest ever recipient of the Virtuti Militari Cross).

After 1946, when most Poles were expelled from Lviv, the cemetery gradually deteriorated. Insults were written on the monuments, slabs and statues were stolen, and rubbish was dumped on the graves. In 1971, the colonnade was destroyed with bulldozers and the graves were razed to the ground. In 1975, a stone workshop for the production of gravestones was placed in the profaned catacombs. The northern part of the cemetery, where the dead defenders of Lviv were buried in the 1930s, was cut off by a wall and a street was laid across it. The stone lions were moved to the city's corners. One stood on the side of Vinnytsia, and the other in the Culture Park on Dzerzhinsky Street (formerly Pełczyńska Street). The symbols on the lions' shields were changed.

In 1989 the Polish side began negotiations to recognise the Cemetery of Defenders of Lviv as a historical complex. They were crowned with success in November 1990. Already earlier, in May 1989, the workers of the Polish company "Energopol", operating in Ukraine, had semi-legally started cleaning works in the cemetery. Jozef Borkowski, the director of the company at the time, took great credit for this.

In 1995 an intergovernmental agreement was signed on the restoration of the cemetery. Unfortunately, the Ukrainian side did not abide by the agreements of the agreement, works on the cemetery were blocked.

By the end of the 1990s, despite numerous controversies and objections on the part of the Ukrainian authorities of Lviv (e.g. regarding the content of the inscriptions on the monuments) and despite the destruction of the restored parts of the cemetery by so-called unknown perpetrators, the work on the reconstruction of the cemetery was brought to a successful conclusion. This work was coordinated and financed by the Council for the Protection of Struggle and Martyrdom Remembrance. At the end of 1997, the exhumation of the graves located under the road built by the Soviets began. The work was carried out by a Polish team under the direction of Professor Andrzej Kola. The exhumed remains of the soldiers were buried in newly constructed quarters A and B in the cemetery. Negotiations continued for several years, conducted by the OPWiM Council with the Ukrainian authorities, concerning the restoration of the monuments to the French and Americans, the Unknown Soldier plaque, the symbol of the sword on the grave of those killed at Persenkovka and the return of the lion sculptures to the cemetery. On 24.06.2005, in the presence of the Presidents of Poland and Ukraine - Aleksander Kwasniewski and Viktor Yushchenko, the cemetery was ceremonially consecrated.

Currently, the necropolis has 2256 graves. Since 2017. The Freedom and Democracy Foundation has been providing permanent year-round care for this cemetery as part of a task subsidised by the programme of the Ministry of Culture and National Heritage "Sites of National Remembrance Abroad".