The first owner of Livadia palace was Leo Potocki, the Polish magnat. In 1834 he acquired Livadia and built a palace designed by K. I. Ashliman. His gardener, Dellinger, landscaped a 40 desiatina park around the palace. Later it became a summer residence of the Russian imperial family.

In 1909 the last Russian tsar, Nicholas II, and his wife travelled to Italy, where they were captivated by Renaissance palaces shown to them by Victor Emmanuel III. Upon their return, they engaged Nikolay Krasnov, Yalta's most fashionable architect, to prepare plans for a brand new imperial palace. Krasnov aimed to fit organically new building in the overgrown park, to do all its parts be accessible to air and sun, and, at last, to make it organically melted with nature and sea.

In November 1920 with establishment of Soviet power in Crimea Livadia was nationalized and transformed into the first sanatorium for peasants.

The Yalta Conference was held there in 1945, when the palace housed the apartments of Franklin Delano Roosevelt and other members of the American delegation. Today the palace houses a museum, but it is sometimes used by the Ukrainian authorities for international summits.