The palace was begun by Uzun Hasan, ruler of the Aq Qoyunlu dynasty from 1452 to 1478, and completed by his son Yaqub Beg between 1483 and 1486. It stood at the center of the Sahebabad Garden in the northern part of Tabriz, probably built on the foundations of an earlier structure by Jahan Shah. The garden and its palace became the dynastic center of the Aq Qoyunlu capital. The building's octagonal form, its lavish decoration, and its function as the seat of power made it one of the most significant architectural achievements of 15th-century Iran. The Ottoman polymath Matrakci Nasuh included it in his 1537–1538 map of Tabriz, and early Safavid painters depicted it in works like Nighttime in a City, dated around 1540.

In 1514, the Ottoman Sultan Selim I defeated Shah Ismail I at the Battle of Chaldiran and advanced on Tabriz. The Hasht Behesht Palace was briefly occupied and systematically looted. Precious goods were stripped from the halls and sent to Istanbul. Artists from the Tabriz court were taken as well, forcibly relocating the creative talent that had made the palace's decoration possible. Shah Ismail's personal items, captured at the palace, ended up in Istanbul's Topkapi Museum, where they remain to this day. The looting was thorough but the building survived -- for another seventy years.

In 1585, the Ottoman general Jafar Pasha demolished the Hasht Behesht Palace and replaced it with a massive defensive fortification, the Castle of Jafar Pasha. The decision was military pragmatism over architectural preservation -- a palace was a symbol of the enemy's dynasty, and a fortress was a tool of occupation. Nothing of the original structure survives above ground today. Yet the palace's influence outlived its physical existence. The Hasht Behesht in Isfahan, built more than a century later, drew directly on the Tabriz original. The palace contributed to the broader Hasht Bihisht architectural model -- the eight-paradise layout -- that became a defining pattern in Iranian palace design.

Domenico Romano's description remains one of the most detailed accounts of the palace. Four entrances on the ground floor, apartments decorated beyond what he could articulate, realistic paintings of diplomatic scenes and hunts covering the walls. The color palette alone -- gold, silver, ultramarine -- suggests a building designed to overwhelm visitors with the wealth and sophistication of the Aq Qoyunlu court. Manuscripts commissioned by Yaqub Beg, including the celebrated Khamsa of Nizami from 1481, were produced in connection with this court. The palace was not just a residence; it was a statement of cultural ambition. That statement now survives only in travelers' accounts, Ottoman maps, and Persian miniature paintings.