The brothel, famous enough to warrant mentioning in the 7-volume Nouveau Larousse illustré encyclopaedia of 1904, was founded by the Irish-born Madame Kelly, who was closely associated with several members of the prestigious Jockey-Club de Paris. She sold shares in the profitable business to wealthy anonymous investors. The total cost of the establishment was reported to be the exorbitant sum of 1.7 million francs. The entrance hall was designed as a bare stone cave; the bedrooms were lavishly decorated, many in their own style: Moorish, Hindu, Japanese, Pompeii or in the style of Louis XVI. The Japanese room won a design prize at the 1900 World Fair in Paris.
Henri de Toulouse-Lautrec was a frequent visitor; he painted 16 tableaux for the house, now held in private collections. The poet Guy de Maupassant built a copy of the Moorish room in his mansion at the sea, so that he wouldn't have to miss it during his vacations. "Bertie", Prince of Wales, who would later become King Edward VII of the United Kingdom, often visited the Chabanais during the 1880s and 1890s. One room carried his coat of arms over the bed. The room contained a large copper tub with a half-woman-half-swan figurehead, which he liked to fill with champagne to bathe in with his prostitutes. (In 1951, after the closure of the brothel, Salvador Dalí would buy the tub for 112,000 francs.) Edward, heavily overweight, also had himself built a special "love seat" (siège d'amour) in the brothel, allowing easy access for oral and other forms of sex with several participants. Other prominent visitors included Cary Grant, Humphrey Bogart and Marlene Dietrich.
The French government sometimes included a visit to the Chabanais as part of the program for foreign guests of state, disguising it as "visit with the President of the Senate" in the official program.
In the mid-1920s, Le Chabanais was overtaken by the One Two Two as the top luxury brothel in Paris. During the World War II German occupation of France, twenty top Paris brothels, including Le Chabanais, Le Sphinx and the One Two Two, were reserved by the Wehrmacht for German officers and collaborating Frenchmen. The brothels flourished during this time, and Hermann Göring visited Le Chabanais, as is related in the 2009 two-volume book 1940–1945 Années Erotiques by Patrick Buisson.
The French legal brothels, known as "maisons closes" or "maisons de tolérance", were closed by law in 1946, after a campaign by Marthe Richard. The backlash against the brothels was in part due to their collaboration with the Germans. A 2002 survey showed that, despite the fact that 64% of the French thought that prostitution was "a degrading practice for the image and the dignity of the woman (or the man)", nearly two-thirds believed that reopening the brothels would be a good idea.
Today, the six-story building is used as an apartment house. The Musée de l'Erotisme in Pigalle devotes one floor to the maisons closes, exhibiting Polissons et galipettes, a collection of short erotic silent movies that were used to entertain brothel visitors, and copies of Le Guide Rose, a contemporary brothel guide that also carried advertising. The 2003 BBC Four documentary Storyville – Paris Brothel describes the maisons closes and contains footage of the Chabanais. A replica of Edward's love seat is exhibited in a Prague sex museum; the original was sold at auction in 1996 to a private party.
- Die Sphinx im Freudenhaus, Süddeutsche Zeitung, 17 August 1996. (German)
- Dirty Bertie's seat of pleasure, The Times, 17 January 2004
- Remembering the brothels the French want back, Agence France Presse, 6 April 2003
- A Nice Mix of Art, History and Sex, Metropole Paris, 16 January 2004
- Die Schliessung der "Maisons closes" lag im Zug der Zeit, Frankfurter Allgemeine Zeitung, 15 October 1996. (German)
- Storyville – Paris Brothel, BBC Four documentary, 2003
- Genevieve Roberts (6 November 2009), "Sin city: show celebrates the Paris brothel that was loved by Cary Grant", The Independent
- Peter Allen, Sleeping with the enemy: How 'horizontal collaborators' in Paris brothels enjoyed a golden age entertaining Hitler's troops, Daily Mail, 1 May 2009
- Survey results, CSA, 23 October 2002. (French)
- Sean Thomas, Two’s company, three’s a sex throne, The First Post, 6 December 2005
- "Maisons Closes 1860– 1946", VINGT Paris News, 8 December 2009
- Contemporary photos of the Chabanais(link broken)
- Photo of the building's facade today
- Photo of Edward's love seat