http://vitalesbellavista.com/Italy-Rome-Vatican-obelisk.jpg
Saint Peter Square, also known as Piazza del Popolo (Peoples Square) with the Obelisk as the center piece.

The person who built the Vatican Obelisk was the Egyptian Pharaoh Mencares in 1835 B.C. in honor of the Sun. It was built at the Egyptian city of Heliopolis. Centuries later, in 10 B.C. the Roman Emperor, Augustus, conquered Egypt and moved the Obelisk to the Julian Forum on the Egyptian city port of Alexandria. It stayed there until the year 37 A.D. when Emperor Caligula, after ordering the destruction of the forum, transferred the Obelisk to the Coliseum in Rome.

More than fifthteen centuries later, in 1586, Pope Sixtus V moved it from that location to the Vatican grounds, close to Saint Peter's Basilica. Three centuries later when Saint Peter Square was built, the Obelisk was moved once more, just a few meters, playing an important part as a point of reference over the plaza, and as an expression of the Catholic Church power.

It is ironic that a monument built for a pagan religion serves today as a welcome entrance for the Catholic visitors that gather around one of the more revered places in Christianity.

According to "everything2.com":

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An Egyptian obelisk made of red granite, which stands today in the piazza of St. Peter's, the Vatican. Also called the St. Peter Obelisk. It is the 2nd largest obelisk in Rome, standing at slightly over 75 feet in height and weighing approximately 330 tons. It is one of two Roman obelisks that have no intentional markings or hieroglyphics, the other being The Obelisk of Esquiline.

The Vatican Obelisk was originally erected at Heliopolis by an unknown pharaoh. The Emperor Augustus had it moved to the Julian Forum of Alexandria, where it stood until year 37 A.D., when Caligula ordered the forum demolished and the obelisk transferred to Rome. He placed it in the center of the Circus, where it would preside over Nero's countless brutal games and Christian executions.

In 1586, Pope Sixtus V decided to have it moved near the Saint Peter's Basilica. The job was given to Domenico Fontana, the architect who built the Lantern Palace and reconstructed the Vatican Library. Within this library is a fresco documenting his herculean task, which utilized nearly 1,000 men, 150 horses, a huge earthen ramp, and innumerable levers, wedges, and hoists. Legend said that a bronze globe of the top of the obelisk contained the ashes of Julius Cesar. The globe, which proved to be empty, was removed by Sixtus V, who had it replaced by a bronze cross. Eighty years later Bernini designed the modern St. Peter's square, with its impressive elliptic colonnade around the obelisk. In 1818 four Egyptian lions were added to its base.

Why erect an Egyptian obelisk at the center of the Catholic universe? The pope stated that it was in memory of the martyrdom of St. Peter, which is a testament to his public relations skills. An obvious reason behind the erection was simple aesthetics, as obelisks naturally guide the eye and are pleasing symbols of might. But perhaps the real reason had more to do with power. The manipulation of the monolith was clearly an expression of dominance on the part of the Vatican, just as it had been for the Roman emperors who had stolen great artifacts from Egypt centuries earlier. The scope of the project demonstrated to all the authority of Sixtus V, who was able to grant Fontana extraordinary powers to requisition any labor, tools and materials required for the task, and to punish any who dared impede the work with imprisonment or even death.
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http://www.saintpetersbasilica.org/Exterior/Obelisk/Obelisk-erect-engrav-fsp.jpg
Hundreds were required on the choreographed effort to move the Obelisk.

http://blog.miragestudio7.com/wp-content/uploads2/2007/08/moving_the_vatican_obelisk2.jpg
Erecting the Vatican Obelisk.