The palace was built on the old Corpus Christi hospital plot, one of the medieval hospitals in the city. In 1558 the city underwent changes with the arrival of Bishop Esteban Almeyda el solar, and the hospital was moved to the parish of Santiago. Its construction probably began at the beginning of the XVI century, soon after the bishopric in Orihuela.

It underwent notable alterations in the XVIII century under the orders of the bishops José Flores Osorio and Pedro Albornoz Tapia. It lost its original functionality halfway through the XX century and it was restored at the beginning of the XXI century, and at present it is the head office of the Diocesan Museum of Sacro Art.

It is the biggest palace in the city, with a rectangular shaped floor built around three courtyards. There is a hierarchy system of floors visible in the main façade, which can be seen in the size of the gaps and the materials used. The main doorway is of particular interest, with the shield of the bishop Obispo José Flores Osorio.

The indoor cloister with heraldic decoration is worth a mention, as is the main stairway with its red Alicantine marble and the dome over an octagonal drum whose glazed royal blue tiles can be seen from the outside.