In Byzantine times, the Hippodrome was the heart of social life, and it retained this function during the Ottoman period when it was known as the At Meydanı or 'Horse Square'. The Ibrahim Paşa Palace was possibly built in the reign of Bayezid II on the remains of the western tiers of the ancient Hippodrome. Unusually for Ottoman civil architecture, which was customarily built of timber, the İbrahim Pasha Palace was built with brick and stone masonry on a slope. Sources describe it looking like a castle with iron gates from outside.
Due to the fact that the site is on a slope the main façade, overlooking the Horse Square and the Sultan Ahmet Mosque, is a three-storied structure comprising a basement, ground floor and upper floor, whereas the other parts of the building, on the higher level, have two stories.
The palace was built around four courtyards surrounded with porticoes. The first and second courtyards overlook Horse Square, while the third courtyard and the fourth (now the site of the courthouse and its archives) were introverted. The first courtyard provides two entrances into the palace. In the second courtyard, the ground-floor is a continuous hall with sturdy piers supporting barrel-vaults extending perpendicular to the courtyard. The upper floor is surrounded with domed rooms located behind domed porticoes to the north and south. To the south is the divanhane, reserved for the sultan when he visited the palace for occasions like circumcision and wedding festivals. The summer divanhane has a row of wooden posts supporting a wooden roof, and a balcony overlooking Horse Square, from which the sultans could watch ceremonial parades. There are numerous miniatures in Ottoman manuscripts depicting the festivals held in Horse Square and the sultan watching them from this balcony. To the west is the winter divanhane.
The third courtyard is surrounded by a 'U'-shaped building on three sides. The ground floor is a continuous vaulted gallery and the upper floor has domed porticoes in front of the domed rooms. The part of the palace around the fourth courtyard and the adjoining stables were destroyed in 1939 for the construction of the Istanbul Courthouse. Today the third courtyard functions as the archives of courthouse.
The İbrahim Paşa Palace underwent many alterations and restorations following damage by earthquakes, fires and riots. It is the only surviving example of an Ottoman state official's palace in Istanbul today. The first courtyard is partially occupied by another Ottoman structure concealed by the Land Registration office building, which extends along the third part of the palace as well. The last restoration was carried out between 1966 and 1983 and the Museum of Turkish and Islamic Arts moved here in 1984.