Villa Aurora was built in 1928 as part of a development initiated by Arthur Weber and George Ley in cooperation with the Los Angeles Times, which reported on its construction as a 'demonstration house.' Architect Mark Daniels designed it in Spanish style. The house pipe organ was built by Santa Monica Artcraft. Wood for the ceilings came from Spain; fountains came from Italy. It was equipped with then-novel domestic technologies: an electric garage opener, a dishwasher, a refrigerator, a gas range. When it was finished, the Great Depression was beginning, and the house could not be sold. Developer Weber and his family moved in themselves in 1931. Financial difficulties forced him out in 1939, and the property sat empty until 1941, when Lion and Marta Feuchtwanger arrived in Los Angeles from New York and Mexico, having escaped from the South of France.

Lion Feuchtwanger was drawn to the solitude the hillside property offered for his work. He created his third personal library at Villa Aurora; the collection grew to 30,000 volumes. During the war, the Villa functioned as a gathering point for the community of German-speaking exiles in Los Angeles. The regulars included Thomas and Heinrich Mann, Arnold Schoenberg, Vicki Baum, Bruno Frank, Ludwig Marcuse, Franz Werfel, and Bertolt Brecht, as well as European expatriates including Charlie Chaplin and Charles Laughton. The conversation that took place in those rooms — between people who had fled fascism and were watching the war unfold from a hillside in California — constituted one of the more remarkable intellectual salons of the twentieth century. Feuchtwanger wrote six historical novels at Villa Aurora, including The Jewess of Toledo and This Is the Hour.

After Marta Feuchtwanger's death in 1987, USC's plans to sell the property prompted an intervention from the German cultural community. A campaign to preserve Villa Aurora as a site of exile literature found support from German artists and cultural institutions, and the effort succeeded. Since 1995, Villa Aurora has operated as an artists' residence, offering fellowships for German-based writers, visual artists, composers, and filmmakers. The program is administered jointly by the Villa Aurora and Thomas Mann House e.V. in Berlin and the Friends of Villa Aurora Inc. in Los Angeles. The house still holds 22,000 books, with the most valuable volumes moved to the USC Feuchtwanger Memorial Library. Past fellows have included filmmaker Maren Ade, writer Yoko Tawada, choreographer Sasha Waltz, and performance artist Rosa von Praunheim.

Pacific Palisades was, in the 1940s, a refuge in a specific sense: it was where people who had lost their countries came to work. Thomas Mann's house, Seven Palms, at 1550 San Remo Drive, was a few streets away from Villa Aurora — a coincidence of geography that created a neighborhood defined by displacement. Mann had been offered Villa Aurora before the Feuchtwangers bought it, but he wanted something new. The two exiles ended up a short walk apart, both writing in English and German on hillsides overlooking the Pacific. The Thomas Mann House was purchased by the German federal government in 2016 for approximately $13 million. Villa Aurora, through different means and a different rescue, had already been returned to the purposes its most famous residents would have recognized.