François de Cuvilles built the mansion between 1733 and 1737 for Sophie Caroline von Ingenheim, countess Holnstein, a mistress of Elector Charles Albert. The interior decoration was done by Johann Baptist Zimmermann. It is Munich's best rococo style palace. Only the elegant façade can be inspected since the palace is closed to the public. The façade layout shows three storeys and nine window bays, and a flat central avant-corps with a gable, as often seen in Munich since the time of Joseph Effner. The breakdown of window axes in three fields of three axes also corresponds to the internal division into main and side wings. The upper floors are divided by pilasters.
From 1977 to 1982 the Palais Holnstein served as residence of Archbishop Joseph Cardinal Ratzinger (later Pope Benedict XVI), who stayed here also during his visit in September 2006. The current Munich Archbishop Reinhard Marx lives in three rooms of the palace. The Free State of Bavaria paid in 2013 6.5 of the 8.7 million Euro renovation costs (= 75 percent).