The palace is located in Campo Marzio, a few steps behind Piazza Navona.
In the archaeological excavations preliminary to the restoration work there have been discovered the structures of a late imperial Roman domus and the remains of numerous medieval tower-houses incorporated within the Renaissance palace.
The core of the current builiding is due to Girolamo Riario, in the 15th century: relevant to this stage are the wooden ceilings of the first floor and the mural paintings of the Sala della Piattaia.
The cardinal of German origin Markus Sitticus III von Hohenems Altemps acquired it in 1568 and therein established his collection of ancient sculptures. Representative interventions of the Altempsian period are the courtyard and the altana (rooftop loggia), the monumental chimneypiece and the Church of St. Anicetus, the decorations of the painted loggia and the frescoes of the Room of the Painted Perspectives.
During the 18th century, the Palace returned to being a diplomatic residence and accommodated lavish feasts in both the courtyard and the theatre.
In the 19th century the French lieutenant Jules Hardouin inherited the entire property of his deceased wife, Lucrezia Altemps. In 1883 he gave his consent to the wedding between the daughter by his first marriage, Maria, and Gabriele D'Annunzio; following disagreements with his son-in-law, he saw himself compelled to cede the building to the Holy See which, between 1894 and 1969, bestowed its usage to the Spanish Pontifical College.
The Ministry of Heritage and Cultural Activities acquired the Palace in 1982 and the Archaeological Superintendency of Rome has led a rigorous restoration culminating in the inauguration of the museum in 1997.