The original palace went up in the fifteenth century, on the site of older stone structures and possibly a wooden lodge before that. Grand Duke Alexander Jagiellon brought his court here after marrying the daughter of Moscow's Ivan III. His successor, Sigismund I the Old, expanded the building dramatically: a third floor, another wing, gardens reaching toward the river. The Italian architect Bartolomeo Berrecci da Pontassieve probably drew the plans. In 1517, in one of these rooms, an emissary from the Holy Roman Empire presented Sigismund with the woman who would become his second wife: Bona Sforza, the Milanese duchess who would bring Italian Renaissance taste north into the Polish-Lithuanian world. According to the Holy See's own ambassador, the palace at its peak held more treasures than the Vatican.

The palace's destruction came in stages. The Muscovite army captured Vilnius in August 1655 during the Russian invasion. By the time Lithuanian forces retook the city six years later, fire had gutted the palace and its treasures had been carried east. For a century and a half it stood as ruins, slowly inhabited by squatters and partially collapsed. After the Polish-Lithuanian Commonwealth was carved up by its neighbors and what remained of Lithuania was absorbed into the Russian Empire, the imperial administration finished the job in 1801: tear it down, fill the ditch, plant grass. The order was unambiguous. A symbol of Lithuanian statehood would not be permitted to stand.

After Lithuania regained independence in 1990, debate began almost immediately about what to do with the empty site. Three options circulated. Bury the excavated foundations under fresh soil. Build a modern protective structure over the ruins. Or rebuild the palace itself. The third option won, championed by President Algirdas Brazauskas and codified into law by the Seimas in 2000. Critics argued that reinforced concrete and modern materials would produce a fake, that the project would overshadow Vilnius Cathedral, that authentic manor houses elsewhere were collapsing for lack of funding. The state built it anyway. Bloc A opened on July 6, 2013, the 760th anniversary of King Mindaugas's coronation. The full building opened five years later.

On November 28, 2013, the palace hosted the Eastern Partnership Summit. The dinner table held heads of state from across the European Union: Merkel, Cameron, Hollande, Komorowski. Ukrainian President Viktor Yanukovych was expected to sign the European Union–Ukraine Association Agreement that night, in this very building, in a country that had been free for twenty-three years. Under pressure from Moscow, he refused. The refusal triggered the Euromaidan protests in Kyiv within days. Within months Yanukovych had fled, Crimea was annexed, and the war that became the full-scale Russian invasion of Ukraine in 2022 had begun. The palace where Lithuania remembered its sovereignty had become the room where another country's sovereignty was openly contested.

The palace today is a museum. The throne room glitters with restored tapestries; the basement displays the original fifteenth-century brickwork the modern walls were built around. Italian Renaissance paintings donated by businessman Pranas Kiznis hang in galleries that did not exist a generation ago. In July 2023, the Grand Courtyard hosted a gala for delegates of the Vilnius NATO Summit, with Ukrainian flags visible across the city. None of this is accidental. The reconstructed palace is a country saying, out loud, what it wants its history to mean.