The Old Palace’s first inhabitants were the Hereditary Prince Friedrich Ludwig and his wife Helena Pavlovna (1799 to 1819). The princely family then resided at Ludwigslust but Helena Pavlovna had become accustomed to a culturally stimulating life at her home in St Petersburg. As the coach trip to Schwerin for various events proved too much of a burden over time, the Ducal couple moved to Schwerin.
Later, Grand Duke Paul Friedrich lived in the Old Palace. He intended to use this interim residence until his planned newly-built castle in the Old Garden was ready. To prepare for his moving in the Old Palace was remodelled and extended by an arched gateway linking it to the neighbouring house.
In 1842 the Grand Duke died unexpectedly, after which the Old Palace served as a dower house for his widow Alexandrine.
Today the building is used by the State Parliament administration.