It was the summer residence of the Dukes of Saxe-Meiningen, and is surrounded by 160 hectares (1.6 square kilometres) of English landscape garden, which contain, among other objects of interest, a cavern 300 metres long, through which flows a large and rapid stream.

It sits on a platform with a height of around 460 metres above sea level, part of the dolomite hills at the western edge of the Thuringian Forest.

[2]: 7 A fortified structure, possibly initially a pre-Christian holy site, may have been roughly in the same location as the current house by the 6th century.

Saint Boniface, the apostle of the Germans, reportedly lived and preached at Altenstein in 724 and built a chapel on the so-called Bonifatiusfelsen.

In 1347, Friedrich der Strenge married Katharina von Henneberg, the local estates of Steinbach and Schweina were given to her as dowry.

[5]: 4, 17 In the late 15th century, the Altenstein passed to the Ernestine branch of the House of Wettin (in 1485) who gave it as a fief to the Franconian family of Hans Hund von Wenkheim [de] (died 1505) in 1492.

[5]: 4, 17 Not far from the Altenstein is the place where, in 1521, Martin Luther was "seized" by the order of the elector Frederick the Wise in a staged kidnapping, to be carried off to the Wartburg.

[4] An old beech called "Luther's Tree", which tradition connected with the reformer, was blown down in 1841, and a small monument now stands in its place.

He had some improvements made at the Schloss and the Hofmarschallamt (a simple three-storied building with Doric columns flanking the entry) was constructed.

Whilst the architect had argued for a completely new palace, Georg II insisted on adding or changing the existing structure.

The result was a palace that used the basic Baroque structure, but was designed in the English Renaissance Revival style, featuring two-storied oriels, bow windows, numerous chimneys, and obelisk ornaments.

This style, unique in Thuringia, was inspired by the relationships of the Meiningen dynasty to Great Britain and the taste of Georg II (also known as the "Theatre-Duke"), who liked the plays of William Shakespeare.

[6] Although the upkeep of palace and park was subsequently neglected (in 1918 vandals destroyed the Teufelsbrücke and in 1923 the "Chinese Pavilion" had to be torn down), the ducal family retained use of the Altenstein.

Although negotiations with the company running the Liebenstein spa (which had also rented the property) were well advanced, once the state declared an interest, these agreements were revoked.

On 5 August 1942, Ralf Baron von Saalfeld (as executor of the will) sold the Altenstein estate to Thuringia for 521,000 Reichsmark (equivalent to 2 million 2021 euros).

However, on 4 February 1982, the palace was destroyed by a fire resulting from an electrical defect, causing a total loss of all the interior designs.

[2]: 27 [7] In 1994, the State of Thuringia confirmed the listed status of the Altenstein and since 1995, the palace has been part of the portfolio of the properties of Stiftung Thüringer Schlösser und Gärten [de].

The Federal government financially supported the creation of a memorial commemorating the presence of composer Johannes Brahms, who visited the palace twice.