The site was first used as a lodging house when the King's Head Hotel operated there from at least 1830, owned and operated by William Dixon.
 In 1831 Dixon sold it to William Henry Leeder after which it was known as Leeder's Hotel, with it becoming a social centre for the town with many important dinners and celebrations conducted there.
 The Perth Gazette wrote in August 1833:
Few, if any, of [the employed classes] enjoyed a table such as the gentry made merry with at Leeder's Hotel on the occasion of the King’s birthday celebrations in August 1833, with nine types of meat and a choice of three desserts.

Leeder's Hotel was extended in 1845, by which time it was known as the Freemasons' Tavern and housed the first Masonic Lodge in Western Australia.
Following the death of Leeder in 1845, his wife transferred the management to Julian Carr, a merchant who would later become a prominent local politician and Chairman of the Perth City Council from 1861 until 1869.
 At this time it was known as the Freemasons' Hotel with a number of other proprietors running it in the intervening years, including the wife of future Premier Sir Walter James and George Towton, a prominent horseman and hotelier.

A fire at the rear of the hotel in 1888 destroyed a number of outbuildings, adding to the premises' general dilapidation.
 American real estate investor and former hotelier John De Baun purchased the property from Leeder's widow for ₤14,000 in 1894, along with several other sites along St Georges Terrace.
 He engaged architects Ernest Saunders Porter and Edmond Neville Thomas to design the new Palace Hotel for the site with no expense to be spared and many of the construction materials imported.
 Marble for the fireplaces and mosaic floor tiles for the main entrance and bar-room floors came from Italy.
 It boasted having "electric light and gas laid on in every room", as well as electric bells and speaking tubes "conveniently placed everywhere" and was reputed to have the first lift in Perth as well as 10 bathrooms serving the 50 bedrooms on the first floor.
 De Baun also commenced construction of the nearby Melbourne Hotel in 1895 in similar style, if not quite the same degree of opulence and grandiosity.

John Glowrey (a state member of parliament) leased the Palace Hotel from De Baun in 1901 and carried out the first of many additions and modifications to the building, including the addition of bedroom wings on the north and east wings.
 A newspaper advertisement dated 1903 boasted:
...the hotel as the finest hotel in the State, with 130 bedrooms, a number of suites of private apartments, a writing room and library, fine dining hall, a grand vestibule, electric light and electric elevator and large sample rooms.

De Baun died in 1911 and ownership passed to the West Australian Trustee Executor and Agency Company Limited, although Glowrey's lease was maintained until his death in 1921.
 Charles Atkins (of Atkins Brothers Pty Ltd) purchased the property in 1924 for £48,000.
 A younger relative of the previous lessee, James Henry Glowrey, took over the lease in 1930 and major internal renovations costing £15,000 were undertaken at the same time, including enlarging the bar areas and conversion of the basement billiard room to a new bar area.
 External renovations were made in 1935 and 1939.
 In 1959 a major modernisation project commenced costing £160,000 and included installation of air conditioning, private bathrooms, and the replacement of timber verandas with cantilevered concrete verandas.
 Prior to this refurbishment, engraved lettering of the former name De Baun's Palace Hotel was displayed in the corbelling above the front entrance.
The site was first used as a lodging house when the King's Head Hotel operated there from at least 1830, owned and operated by William Dixon.  In 1831 Dixon sold it to William Henry Leeder after which it was known as Leeder's Hotel, with it becoming a social centre for the town with many important dinners and celebrations conducted there.  The Perth Gazette wrote in August 1833:
Few, if any, of [the employed classes] enjoyed a table such as the gentry made merry with at Leeder's Hotel on the occasion of the King’s birthday celebrations in August 1833, with nine types of meat and a choice of three desserts.
Leeder's Hotel was extended in 1845, by which time it was known as the Freemasons' Tavern and housed the first Masonic Lodge in Western Australia. Following the death of Leeder in 1845, his wife transferred the management to Julian Carr, a merchant who would later become a prominent local politician and Chairman of the Perth City Council from 1861 until 1869.  At this time it was known as the Freemasons' Hotel with a number of other proprietors running it in the intervening years, including the wife of future Premier Sir Walter James and George Towton, a prominent horseman and hotelier.
A fire at the rear of the hotel in 1888 destroyed a number of outbuildings, adding to the premises' general dilapidation.  American real estate investor and former hotelier John De Baun purchased the property from Leeder's widow for ₤14,000 in 1894, along with several other sites along St Georges Terrace.  He engaged architects Ernest Saunders Porter and Edmond Neville Thomas to design the new Palace Hotel for the site with no expense to be spared and many of the construction materials imported.  Marble for the fireplaces and mosaic floor tiles for the main entrance and bar-room floors came from Italy.  It boasted having "electric light and gas laid on in every room", as well as electric bells and speaking tubes "conveniently placed everywhere" and was reputed to have the first lift in Perth as well as 10 bathrooms serving the 50 bedrooms on the first floor.  De Baun also commenced construction of the nearby Melbourne Hotel in 1895 in similar style, if not quite the same degree of opulence and grandiosity.
John Glowrey (a state member of parliament) leased the Palace Hotel from De Baun in 1901 and carried out the first of many additions and modifications to the building, including the addition of bedroom wings on the north and east wings.  A newspaper advertisement dated 1903 boasted:
...the hotel as the finest hotel in the State, with 130 bedrooms, a number of suites of private apartments, a writing room and library, fine dining hall, a grand vestibule, electric light and electric elevator and large sample rooms.
De Baun died in 1911 and ownership passed to the West Australian Trustee Executor and Agency Company Limited, although Glowrey's lease was maintained until his death in 1921.  Charles Atkins (of Atkins Brothers Pty Ltd) purchased the property in 1924 for £48,000.  A younger relative of the previous lessee, James Henry Glowrey, took over the lease in 1930 and major internal renovations costing £15,000 were undertaken at the same time, including enlarging the bar areas and conversion of the basement billiard room to a new bar area.  External renovations were made in 1935 and 1939.  In 1959 a major modernisation project commenced costing £160,000 and included installation of air conditioning, private bathrooms, and the replacement of timber verandas with cantilevered concrete verandas.  Prior to this refurbishment, engraved lettering of the former name De Baun's Palace Hotel was displayed in the corbelling above the front entrance.
Palace Hotel, Perth