Tipu Sultan's Palace is located very close to the fort. It is now converted to a museum. The building of the palace was started by Hyder Ali and it was completed by Tipu Sultan. The construction of the Palace was completed in the year 1791 and it took ten years to plan and construct the palace.
The Palace was one of Tipu Sultan's summer retirements. It is a double storied flowery wooden structure. It has columns, curves and balconies which are laid with gardens on both sides of the path which leads to the palace. A dedication on the wooden screen reports the palace to be an "Abode of Happiness".