This place's name is 16th-century French for `royal hill', and it was bestowed by the French explorer (Breton, if you prefer) Jacques Cartier in 1535 to honour the French king François I who had backed Cartier's expedition. The great hill to which it applied is on an island in the St Lawrence river, and on the hill was the Native American (Iroquoian) settlement called Hochelaga `beaver lake' after an adjacent lake from whose site beaver remains have been recovered archaeologically. The name Montréal was eventually extended to the island. When the ancestor of the modern city was founded in 1642, it was given the name Ville-Marie de Montréal `City of Mary of Montréal', which was normally shortened to its current form from 1724 onwards, and this was made official in 1833.

The city is historically French-speaking, of course, and its English speakers do not care very much about the acute accent, nor about the French pronunciation!