In the area where Çırağan Palace is located, the first mansion was built by Damat İbrahim Paşa in the 18th century for his wife Fatma Sultan.
The construction of the present palace began in 1857 in the reign of Abdülmecid, but the construction of the palace stoped due to the death of Abdülmecid in 1863 and financial difficulties. It was completed in 1871 in the period of Abdulaziz.
On November 14, 1909, the Çırağan Palace was started to be used as the Assembly Building. During this period, the works of Rembrandt and Ayvazovsky from the great art collection of II. Abdulhamid are included.
On January 20, 1910, the palace was burned within 5 hours with a fire coming out of the upper part of the Assembly Hall and the heating chimney in the attic. Many valuable antiques, II. Abdülhamid's private collection and the library of V. Murad were burnt to the ground.
During the period when Istanbul was under occupation at the end of World War I, the ruins of Çırağan Palace were used by a French fortress with the name 'Bizo Barracks'.
The restoration was started in 1987 as a hotel. After a long period of design and construction work, the Çırağan Palace Hotel was opened in 1990. Historical Palace opened its doors in 1992.