In 1610, Pedro de Peralta, the newly appointed governor of Santa Fe de Nuevo México covering most of the modern American Southwest, began construction on the Palace of the Governors, though some recent historical research has suggested that construction began midway through his term in 1618.

[citation needed] Lew Wallace wrote the final parts of his book Ben-Hur: A Tale of the Christ in this building while serving as territorial governor in the late 1870s.

He remembered later in life that it was at night, during a severe thunderstorm in the spring of 1879, after returning from a tense meeting with Billy the Kid in Lincoln County, when he wrote the climactic Crucifixion scenes of the novel.

Wallace worked by the light of a shaded lamp in the shuttered governor's study, fearing a bullet from outside over the tensions surrounding the Lincoln County War.

[citation needed] In 1909 anthropologist Dr. Edgar Lee Hewett invited the young archeologist Jesse L. Nusbaum to oversee the restoration of the Palace of the Governors that had fallen into disrepair.