The palace was built in 1576-1583 for Ascanio Caffarelli by Gregorio Canonica, a pupil of Vignola. It stands in the area of the Tarpeian cliff, on the ruins of the ancient temple of Jupiter Capitolinus, founded, according to tradition, by Tarquinio Prisco and completed and inaugurated in 509 BC under Tarquinio Superbus.
Over the centuries it has undergone numerous transformations, which have changed its original shape.
It overlooked the courtyard of the Palazzo dei Conservatori and included two gardens (the Caffarelli Garden and the one later called Giardino Romano); the large portal on Via delle Tre Pile, consisting of a tympanum with a broken architrave and two masks, was the monumental entrance to the property.
Sold in 1854 to Wilhelm I of Prussia, after the First World War the palace was confiscated by the Italian Government from Germany, which had an embassy there. Partially demolished for archaeological excavations, it was then restored to house a large terrace (Terrazza Caffarelli) on the upper floors, while the ground floor, which had been partly dismantled for the excavations of the Temple of Capitoline Jupiter, was used to set up a new museum sector (Museo Mussolini, later Museo Nuovo).
It has three floors with nine windows each, whereas originally there were seventeen.
On the ground floor we can see a large rusticated portal, surmounted by a balcony, off-centre
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