Denyusya Square Co., Ltd. (株式会社電友社スクウェア) was founded in 1983 by Masafumi Miyamoto. The company was a subsidiary of Denyusya Co., Ltd., a power line construction company owned by Miyamoto's father. While at the time game development was usually conducted by only one programmer, Miyamoto believed that it would be more efficient to have graphic designers, programmers and professional story writers working together on common projects. Square's first title was The Death Trap (1984), a text adventure with graphics designed by part-time employee Hironobu Sakaguchi.

In September 1986, Masafumi Miyamoto gained independence from Denyusya Co., Ltd. and established Square Co., Ltd. with 10 million yen in capital, bringing on Hironobu Sakaguchi and Hisashi Suzuki as directors.