The Julian Calendar was installed by Julius Caesar in 46 BC. At the time the Roman year was 709 ab urbe condita. The new calendar was chosen after consultation with Sosigenes and had been devised by Aristarchus about 200 years earlier.
The year numbering was modified around 527 by Dionysius Exiguus, who introduced the system of "Anno Domini". Years were numbered from the supposed date of the birth of Christ, which he placed at 754 or 755 ab urbe condita.
The previous Roman calendar contained various rules including two different lengths for leap month, plus modifications to the length of February during some leap years. This was further complicated by politics which resulting in the calendar becoming 90 days from its original intended definition.
In order to re-align the calendar to what the Romans thought of as the correct seasons, 90 days were inserted. Because of it unusual length, this year was and is refered to as the year of confusion.
Despite the new calendar being much simplier than the older Roman Calendar, those tasked with implementing the calendar -- the Pontiffs (not the the Pope, but an institution which kept the calendar for the Romans) -- apparently misunderstood the algorithm. They added a leap day every 3 years. This resulted in too many leap days. Augustus Caesar remedied this discrepancy by skipping several leap days after 36 years of such mistakes. It is probable that he decided to skip leap days in the twelve year period -8 AD (9 BC) to 3 AD inclusive. Thus the historic sequence of leap years (years with a leap day) is thought to have been 43 BC, 40 BC, 37 BC, 34 BC, 31 BC, 28 BC, 25 BC, 22 BC, 19 BC, 16 BC, 13 BC, 10 BC, AD 4, AD 8, AD 12 etc.
Because of Julius' and Augustus' contribution to the calendar, the Romans eventually named months after each of them, renaming Quintilis [Fifth month with March = month 1] and Sextilis [Sixth Month].
The original scheme for months in the Julian Calendar may have been very regular, alternating long and short with an exception at the end of the year at the end of February. From January through December, the month lengths may have been originally defined as: 31, 29(30), 31, 30, 31, 30, 31, 30, 31, 30, 31, 30 Augustus change this in 8 BC to: 31, 28(29), 31, 30, 31, 30, 31, 31, 30, 31, 30, 31 giving us the irregular month lengths which we still use today.
One thing that was not changed by the reform of the Roman calendar into the Julian calendar was the dates of the Nones and Ides. In particular, the Ides are late (on the 15th rather than 13th) in March, May, July and October. This suggests that these months always had 31 days in the Julian calendar.
The Julian Calendar was in general use in Europe from the times of the Roman Empire until 1582, when Pope Gregory XIII adopted the Gregorian Calendar, which was soon followed by most Catholic countries. The Protestant Countries followed later, and the Eastern Orthodox ones yet later - Russia for example remained on the Julian Calendar until after the Russian Revolution (because of which it is called the 'October Revolution' but is celebrated in November - it occurred in October according to the Julian Calendar, but in November according to the Gregorian one). The Eastern Orthodox churches themselves kept with the Julian Calendar until 1923, and then went over to their own revised calendar rather than the Gregorian one. Easter, Christmas and New Year are still calculated according to the Julian Calendar in the Eastern Orthodox churches.