Once the administrative headquarters of the fortress-city within the erstwhile walls, it was built by Daham bin Dawwas in 1747 and is the oldest structure in Riyadh that was razed and rebuilt on numerous occasions over the course of time.

[6][7] Qasr al-Hukm traces its origins to the reign of Deham bin Dawas al-Shalaan in 1747, the-then ruler of Riyadh oasis who built a fortified palace for himself.

[9] As Diriyah was dilapidated by the Egyptian forces in 1818, as a result, Qasr al-Hukm was eventually made the new center of power for the House of Saud by Turki bin Abdullah.

[10] By the 1880s, the Haʼil-based Rashidi Emirate took-over Riyadh and deposed the House of Saud, bringing the Second Saudi State to a close in 1891 after the Battle of Mulayda and exiling its last leader, Abdul Rahman al-Saud and his family to Kuwait.

The palace and its surrounding area gradually declined in importance when King Saud bin Abdulaziz accelerated the expansion and modernization of Riyadh following his ascension to the throne in the 1950s, whereby he began constructing new neighborhoods in the city's north such as al-Malazz and al-Nasiriyah.

Headquarters of some institutions were constructed like the High Court, Civil Defense, Sheikh Muhammad bin Ibrahim Al Alsheikh Mosque, Dekhna Plaza, al-Zal Souq, and modern seven commercial complexes.

[21][22] Following the death of King Abdullah in January 2015, members of the House of Saud pledged allegiance to the new monarch, Salman in the precincts of Qasr al-Hukm.

[24] The palace was shown as the building of a fictitious Saudi immigration court in the 2023 Indian Hindi-language comedy drama film Dunki.