According to records dating from the 13th century, a "castellum" surrounded by four corner towers was once located on the site on which the Rector's Palace is to be found today. The reconstruction of the fortress into the palace took place in the 14th century. The palace was modelled on the Roman imperial palace, as well as the Venetian palaces (in its middle section, the main facade opens up into a portico with two side towers).

The palace received its present form (a single-storey building with four wings closing the courtyard - a portico with a small mezzanine floor gallery and a large floor gallery) in the mid-15th century during the reconstruction following the demolition of the old Rector's Palace in the gunpowder explosion of 1435.

The new Rector's Palace was built in the late-Gothic style by Onofrio de la Cava, an architect from Naples who also built the waterworks and two public fountains in Dubrovnik (1435-1440). The statue on the building is probably the work of Pietro di Martino, an architect and sculptor from Milan.

The building sustained another major damage in 1463, again due to a gunpowder explosion, and another one in the great fire of 1667 which ravaged the town. Shortly taking part in the reconstruction of the Rector's Palace after the explosion of 1463 were two renowned artists: M. Michelozzo from Florence and Juraj Dalmatinac from Zadar. Unfortunately, the Palace was not rebuilt according to Michelozzo's design.

The new style of architecture - the Renaissance - left its mark on the building only in details. At the same time, the facade towers were made shorter so as to be levelled with the middle section of the building. As a result, the vertical Gothic form gave way to the pronounced horizontal form of the Renaissance style.

The disastrous earthquake of 1667 mostly damaged the building's interior (columns and arches of the courtyard and the galleries). It was reconstructed towards the end of the 17th century in the Gothic style, with some baroque elements.

In the courtyard of the Palace, there is the statue of Miho Pracat, a wealthy and renowned sailor from the island of Lopud. The only public monument in the Republic, it was made by P. Giacometti, a sculptor from Recanati.The last reconstruction of the building took place in 1982/84 following the earthquake of 1979.

In the Dubrovnik Republic, the ground floor of the Palace housed the state offices, the notary's office, the law court, and the gaol. The old armoury and the Small Council hall were situated on the mezzanine floor of the southern wing. The eastern wing of the mezzanine floor housed the court guard. A large flight of stairs lead from the atrium to the Great Council hall (pulled down in 1863), whose door bore the inscription "Obliti Privatorum - Publica Curata" (forget private affairs - look after the public causes), and the rooms for functions and the Rector's apartment consisting of a study, a central area, and a bedroom.

Next to the Rector's rooms was the court chapel. The vestibule in front of the hall accommodated the guard of honour during audiences of foreign diplomats with the Rector. All of these rooms today feature period furniture, numerous antique objects and paintings. The apartment of the prison warden and the Senate hall were located in the eastern wing of the first floor facing the sea.