A number of city institutions, including R W Forsyth department store on Princes Street, the Ritz Cinema on Rodney Street and jewellers Abbott of Greyfriars, were to disappear for good.
But it wasn’t all doom and gloom.
A fancy new cocktail bar, Charlie Parker’s, opened up on George Street, the Edinburgh Fringe was more popular than ever and the entire city went Royal Wedding daft to celebrate the marriage of Princes Charles and Diana Spencer.
In sport, there was success for Scotland at Murrayfield against Australia, while ex-Man Utd and Hibs star George Best brought his glamorous new team, the San Jose Earthquakes, to Easter Road.
We’ve had a deep dig through the archives at the Evening News to bring you 17 memories of Edinburgh in 1981.
13. Shakin' Stevens in Edinburgh 1981
Welsh-born singer Shakin' Stevens on stage at the Playhouse theatre in Edinburgh, November 1981. Photo: Norman Watson
14. Victor Abbott of Greyfriars 1981
Victor Abbott outside Edinburgh jewellers' shop Abbotts of Greyfriars, having a retiral sale in December 1981. Photo: Stan Warburton
15. Derelict West Port 1981
Derelict houses and overgrown gardens behind Edinburgh's West Port in September 1981. Photo: Stan Warburton
16. Scotland v Romania 1981
Action from the Scotland v Romania rugby match at Myreside in September 1981. Photo: Ian Brand