In the late 18th and early 19th centuries, the village was the summer residence of King Frederick William III of Prussia and of his wife Queen Louise.
For this reason, in 1795 he bought the estate of Paretz from his tutor's son, his former playmate Count Heinrich von Blumenthal, for 80,000 Thalers (approximately €120,000 as of 2005).
In 1804 the royal couple had the entire village rebuilt to conform to David Gilly's designs but the uniform style is hardly recognizable anymore today.
After the death of Queen Louise in 1810 the palace was left unchanged until 1840 when Frederick William IV had the wallpaper and furniture replaced in several rooms.
A year later, refugees moved into the buildings and in 1948 ownership of the palace was transferred to the Zentrale Verwaltung der gegenseitigen Bauernhilfe (ZVdgB) ("Central Administration of Mutual Aid to Farmers").
Special attractions of the palace are the tapestries that are adorned with exotic plant motives, bird renditions and depictions of landscapes in the Potsdam area.
After World War II, some holes were backfilled with rubble from bombed Berlin (in a peculiar kind of material cycle), today most of them however are home to numerous water fowl and have been placed under environmental protection.