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The Palace of Ajuda was built over a temporary wooden and tent palace in Ajuda, then on the outskirts of Lisbon. The temporary royal residence was constructed for King Joseph I of Portugal, who had developed a fear of sleeping in stone buildings after the 1755 earthquake, which had devastated the capital.

The present palace was first commissioned by the Portuguese royal family in 1795 with Manuel Caetano de Sousa as the chief architect. Later, José da Costa e Silva and Francisco Xavier Fabri took over the construction, but the royal family were forced to flee to Brazil following Napoleon's invasion and the first of many delays occurred.

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