The name Montparnasse stems from the nickname "Mount Parnassus" (In Greek mythology, home to the nine Greek goddesses – the Muses – of the arts and sciences) given to the hilly neighbourhood in the 17th century by students who came there to recite poetry.

Like its counterpart Montmartre, Montparnasse became famous at the beginning of the 20th century, referred to as les Années Folles (the Crazy Years), when it was the heart of intellectual and artistic life in Paris. From 1910 to the start of World War II, Paris' artistic circles migrated to Montparnasse, an alternative to the Montmartre district which had been the intellectual breeding ground for the previous generation of artists. The Paris of Zola, Manet, France, Degas, Fauré, a group that had assembled more on the basis of status affinity than actual artistic tastes, indulging in the refinements of Dandyism, was at the opposite end of the economic, social, and political spectrum from the gritty, tough-talking, die-hard, emigrant artists that peopled Montparnasse.
Virtually penniless painters, sculptors, writers, poets and composers came from around the world to thrive in the creative atmosphere and for the cheap rent at artist communes such as La Ruche. Living without running water, in damp, unheated "studios", seldom free of rats, many sold their works for a few francs just to buy food. Jean Cocteau once said that poverty was a luxury in Montparnasse. First promoted by art dealers such as Daniel-Henry Kahnweiler, today works by those artists sell for millions of euros.

source: Wikipedia