King Mindon founded Mandalay and commissioned the palace. Construction began in June 1857 and was officially completed on May 23, 1859. Large parts were reconstructed from the former Amarapura palace, which was dismantled and moved by elephants. The design is traditional Burmese, with single-story buildings inside a square walled citadel and moat. The walls are about 2 km on each side, with 48 bastions and 12 gates.
British troops captured the palace on November 28, 1885, ending its use as a royal residence. They renamed it Fort Dufferin. Allied bombing in the Second World War destroyed most of the compound. Only the royal mint and the watch tower survived.
Reconstruction began in 1989. The original structures used only teak, but the reconstruction used concrete and corrugated sheet metal roofing. The palace is now a major tourist destination.
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