It was built in the mid-17th century for the knight Jean-Jacques de Verdelin, and it is an early example of Baroque architecture in Malta.

[3] The palace is attributed to the Italian architect Francesco Buonamici, who is sometimes credited for introducing Baroque architecture in Malta.

It was transferred to the government during the French occupation of Malta in 1798,[8] and at this point, two coats of arms on the façade were defaced.

[15] The palace currently belongs to 12 private owners, including Marco Gaffarena, the heirs of Antonio Zammit and the firm B. Tagliaferro and Sons Ltd.

[17] During the Gaffarena scandal in 2015, journalist Caroline Muscat revealed[18] that the government gave Gaffarena €1.65 million in land and cash for his part ownership of another palace in Valletta, the opposition accused the government that it also intended to expropriate the Hotel de Verdelin.

These claims were denied by home affairs minister Carmelo Abela,[16] although it was later revealed that the Land Department had sent architects to draw up a valuation report of the palace between February and April 2015.