The palace was built as a gift from Empress Catherine the Great for Count Grigory Orlov, her favourite and the most powerful Russian nobleman of the 1760s.

Construction started in 1768 to designs by Antonio Rinaldi,[1] who previously had helped decorate the grand palace at Caserta near Naples, and lasted for 17 years.

Panels of veined bluish gray Urals marble separate the floors, while Tallinn dolomite was employed for ornamental urns.

Nowadays, the court is dominated by a sturdy equestrian statue of Alexander III of Russia, the most famous work of sculptor Paolo Troubetzkoy; formerly it graced a square before the Moscow Railway Station.Fedot Shubin, Mikhail Kozlovsky, Stefano Torelli and other Russian and foreign craftsmen decorated the interior.

During the Soviet era, the palace successively housed the Ministry of Labour (1917–19), the Academy of Material Culture (1919–36), and, most notably, the main local branch of the Moscow-based Central (i.e. National) Lenin Museum (1937–91) with sub-branches across Leningrad in Lenin's memorial apartments all over the city - the places where he lived or stayed during his various periods in what was then Saint Petersburg.