The name Daphne — meaning laurel in Greek — came not from the plant itself but from a statue. According to the Byzantine chronicler George Codinus, Constantine I brought a statue of the nymph Daphne from Rome and installed it in or near the palace, and the name attached. The Great Palace complex that Constantine built when he transformed the ancient Greek city of Byzantium into his new imperial capital was an enormous, constantly evolving organism of halls, chapels, courtyards, and galleries. The Daphne was one of its earliest and most significant wings. Its residential core — the koiton, or bedchamber suite — formed the private heart of the complex, while its ceremonial hall, the Augusteus, connected to a wider network of state rooms that would accumulate over the following centuries.

The Daphne was also known by another name: Stepsimon, from the Greek for coronation. This was the hall where emperors were crowned, where empresses received their crowns, and where imperial weddings were solemnized. The function persisted into the middle Byzantine period, even as the palace complex expanded and the centers of power shifted around it. Connected to the Augusteus on one side and to the chapel of St. Stephen on another — the chapel built around 421 by the Augusta Pulcheria to house the right arm of the saint — the Daphne sat at the ritual center of an empire. Two additional chapels, dedicated to the Virgin Mary and the Holy Trinity, were also located within the Daphne complex's southern reach.

Power in Constantinople was always in motion. By the 9th and 10th centuries, the center of court life and imperial ceremony had drifted south within the palace complex, toward the Boukoleon Palace on the Marmara shore and the ceremonial spaces around the Chrysotriklinos, the Golden Hall. The Daphne continued to appear in the ceremonial protocols recorded by Constantine VII Porphyrogenitos in his De Ceremoniis — it was not abandoned — but its prestige was declining. The clearest measure of that decline came when Emperor Nikephoros II Phokas enclosed the palace complex within new defensive walls in the 10th century. The Daphne was not included inside them. The original heart of the palace was left outside the new perimeter.

After the 11th century, the Daphne falls out of the historical record as a functioning space. Disuse became disrepair, and disrepair accelerated under the Latin Empire established by the Fourth Crusade in 1204. The Latin occupiers plundered the palace complex methodically, stripping metals and reusable architectural elements from structures that were no longer being maintained. By the time the Byzantines reclaimed Constantinople in 1261, the Daphne had likely been reduced to shells and rubble. The Palaiologan emperors who ruled for the final two centuries moved their court to the Palace of Blachernae in the city's northwest corner, far from the ancient complex whose ceremonial memory they still honored in title if not in use.

The Walker Trust excavations of 1935–1938 and 1952–1954 uncovered a mosaic-floored peristyle adjoining an apsed hall beneath the area near the Blue Mosque. The architectural historian Jonathan Bardill has proposed that this structure could be the Augusteus of the Daphne Palace — the great reception hall that connected the coronation wing to the rest of the ceremonial complex. If he is right, then the Daphne has been partially touched by archaeology. Whether that identification holds or not, the Blue Mosque's construction in 1616 under Sultan Ahmed I sealed whatever remained beneath foundations and fill. The coronation hall of Byzantine emperors is now the architectural foundation of one of Islam's great monuments — a layering of histories that Istanbul performs, quietly and without announcement, across almost every block of its oldest neighborhoods.