Stanley Palace was built in 1591 on the site of the former Black (Dominican) Friary

It was built as the town house for Sir Peter Warburton, a local lawyer and Member of Parliament. When he died in 1621 the house was inherited by his daughter. 

She married Sir Thomas Stanley who gave his name to the house. After the Civil Wars James Stanley (The 7th Earl) was held under arrest at the house, and transported to Bolton for execution.

Part of the house was demolished and the southwest wing was rebuilt in the early 18th century.

The house then ceased to be a mansion house and by the early 19th century it had been divided into apartments and its condition was deteriorating.

It was bought by the Chester Archaeological Society in 1865 and during the 1870s housed a boys' school.

The building was sold to the 15th Earl of Derby in 1889. In the early 1920s the building contained "a museum of 1,000 curios". The house was given to Chester Corporation in 1928. 

The north wing was rebuilt in 1935.

The 16th century grade II listed building has long been known as one of the city's most haunted buildings, with many of its staff and visitors reporting hearing the sound of children whimpering and giggling over the years.

The sound of clogged shoes can also be heard walking along wooden floor boards in the building's empty rooms, as well as the unexplained stale smell of cigarettes and cigars.

One of the most reported occurrences at Stanley Palace, however, is the figure of a hooded man walking around the older parts of the building.

It has been said the man could be a Dominican Friar who still enjoys roaming the building, but the spirit of a woman wearing 17th century style dress has also been spotted walking the corridors, as if she is looking for something.