Building began before 1745 and finished in 1751, commissioned by Samuel Peploe, the Bishop of Chester. Peploe had been bishop since 1726 and was a controversial figure of his era, known for his vigorous prosecution of dissenters and his close relationship with the Walpole government. His palace was built in the Georgian style on an elevated site overlooking The Groves and the river. The Bishop of Chester did not actually live there until 1865, more than a century after completion, when it formally became the official residence. The arrangement endured into the 1920s, when shifting patterns of church finance and lifestyle led to its abandonment as a clergy house.

The architecture follows mid-eighteenth-century Georgian conventions with a clarity that suggests an experienced hand. The main block facing the river presents eleven bays, with rusticated quoins at the corners providing the visual weight typical of the period. The fourth through sixth bays form a canted projection, three storeys high, containing the ground-floor entrance door, and the projection breaks the long facade into a more interesting composition. All other bays carry sash windows on every floor. Between ground and first floors runs a stone band; above the upper storey, a stone cornice and a brick coped parapet finish the elevation. A one-bay wing extends at the right end. The interior includes an open-well staircase with six flights and turned balusters, replacing an earlier Chinese Chippendale balustrade that has not survived. A large room on the first floor preserves an eighteenth-century decorated ceiling.

When the bishops moved out in the 1920s, the building was converted to a YMCA hostel, a transition that says something about the social housing pressures of interwar Chester. The Young Men's Christian Association had taken over many large nineteenth-century properties across England in those decades, often providing affordable lodging for working-class men who had moved to cities for employment. The Bishop's Palace ran as a YMCA hostel through the Depression, the Second World War, the post-war years, and on into the early 1980s, a span of six decades. Generations of young men slept in rooms that had once accommodated bishops, deans, and visiting dignitaries. The arrangement ended in the 1980s, when the building was converted again, this time into commercial offices.

The Groves is a Victorian riverside promenade that runs along the north bank of the Dee in Chester, lined with bandstand, restaurants, and the rowing boats that have been pulling through the city since the eighteenth century. The Bishop's Palace stands at the top of the bluff above it, looking out over the river and the rowers. From the windows of the first-floor room with the decorated ceiling, the view follows the curve of the river out towards Handbridge and the Grosvenor Bridge in the distance. The location was the point of the original commission. Peploe wanted a palace that signalled the status of the see of Chester, and a riverfront prospect with formal grounds was the eighteenth-century way of doing that.

The building is recorded in the National Heritage List for England as a designated Grade II* listed building. Grade II* covers structures of more than special interest, the middle tier between the simpler Grade II and the rarest Grade I, and the asterisk recognises the building's unusual completeness as a mid-Georgian episcopal palace. The decorated ceilings, the staircase, and the survival of the exterior elevation all contributed to the listing. The current tenants are commercial offices, which is the building's third major use in less than three hundred years, and the modern occupants work inside a structure that Samuel Peploe never lived to occupy but that has carried his name and his commission ever since.