It was raised on the river Manzanares, as a residential palace of the House of Mendoza, in the vicinity of an ancient fortress that was abandoned once the new castle was built.

The lands bordering the upper reaches of the River Manzanares, rich in pastures and forests, were the subject of frequent disputes between different powers that emerged after the Reconquista.

In the last third of the 15th century, the House of Mendoza decided to build a new castle-palace, larger and more luxurious, in accordance with the remarkable economic and political influence achieved by this family.

It was his eldest son, Íñigo López de Mendoza, who finished construction under the direction of the architect Juan Guas, author of Palace of the Infantado, of Guadalajara.

[citation needed] In 1982, the castle hosted the act of establishment of the Parliamentary Assembly of Madrid, during which the region's Statute of Autonomy was also presented.

The whole castle is surrounded by a barbican, which includes loopholes and, carved in low relief, the cross of the Holy Sepulchre of Jerusalem, a title held by Pedro Gonzalez de Mendoza.