Built in the late 18th and early 19th century as a speculative development on the open cliffs east of Brighton by a wealthy merchant, the 14 lodging houses formed the town's eastern boundary until about 1820.

Brighton's transformation from fishing village to high-class, fashionable spa town and resort happened in the second half of the 18th century and was prompted by several factors.

[6] The Duke of Cumberland lived in the town from 1779; the Prince of Wales first visited him in 1783[7] (although he may also have come in search of Brighton's reputed health benefits);[8] and he liked it so much that he came back every year and eventually took up residence at the Royal Pavilion.

[9][10] In 1798, he bought a wide east–west strip of land on the clifftop beyond the eastern edge of the built-up area, about 0.5 miles (0.8 km) east of the Royal Pavilion,[11] and hired an architect (whose identity is not known) and builders to create a crescent of houses which could be let to long-term visitors.

[11] The project was then delayed when Otto ran out of money; he returned to the West Indies to secure more funds, then came back to Brighton and supervised the completion of the crescent, which happened in 1807.

[11] Unlike many contemporary and later developments in Brighton, Otto was able to take his time to complete it because he was not wholly dependent on it for his financial success: his plantations were still his main source of income.

[12][15][16][17] Brighton's 18th-century development had been haphazard and unplanned, and Royal Crescent also represented the first unified architectural design, planned as a set-piece and overseen from start to finish by one man.

[10][11][12] The grand scale was intended to attract middle- and upper-class residents, both permanent and seasonal,[18] and it was immediately successful: early tenants included the Rice family, a brewing dynasty from London.

[10][12][21] The statue was reportedly unable to withstand the weathering effects of sea-spray and strong wind: by 1807, the fingers on the sculpture's left hand had been destroyed, and soon afterwards the whole right arm dropped off.

[22] When the painter of the lettering, a Mr Leggatt, leant back to check his work, he fell off his ladder and was fatally impaled on the metal railings below.

[26] Former Foreign Secretary and Prime Minister George Canning once lived there;[12] this is commemorated by a heritage plaque designed by Eric Gill in the 1920s.