Initially, the Bishop of Kraków quartered on top of Wawel Hill, next to the Cathedral. The first bishop’s palace was only built in the 14th century; it was first mentioned in 1384. Alas the palace was nearly entirely consumed by flames during the fire in this part of the city in the 15th century; the only remnants surviving being the stone cellars with Gothic portals. Successive attempts at rebuilding ended in setbacks, until the works carried out by Gabriel Słoński around 1567 resulted in a new building with two wings and a Renaissance arcaded loggia in the courtyard.

A thorough reconstruction followed in 1642-1647 to the order of Bishop Piotr Gembicki at which time the Palace acquired a shape similar to the one seen today. Both the rusticated portals and the staircase were constructed at that time. After the damage caused by the Swedish invasion in 1655, the Palace was renovated and improved in the period up until the end of the 17th century. It was restored one more time in 1817-1820 to a design by Szczepan Humbert at the initiative of Bishop Jan Paweł Woronicz who saw it in the spirit of a romantic residence filled with national mementos displayed in 16 rooms. Some classicist interiors survive from this time which contain painted decoration, historical paintings by Michał Stachowicz, and relics of King Boleslaus the Brave (Bolesław Chrobry). Most of the furnishing and the collections were burnt, however, in the tragic fire of the city in July 1850, after which the palace was rebuilt again, with work only being completed in 1884.

The Palace is very closely connected to the person of the Metropolitan Bishop of Kraków, Cardinal Karol Wojtyła, who resided here from 1963 to 1978 and was a guest at the Palace during his pilgrimages to Kraków, once he had become Pope John Paul II. The famous “pontifical window” – situated over the main entrance to the Palace in Franciszkańska Street – receives particular reverence. The late-night dialogue which the holy father – standing in the window – conducted with the crowds of people gathered in the square before the Palace, attracted Poles by their thousands.