In 641, upon marrying Princess Wencheng, Songtsen Gampo decided to build a grand palace to accommodate her and to serve as a memorial to this important event. However, the original palace was destroyed by lightening and war damage during Landama's reign. In seventeenth century under the reign of the Fifth Dalai Lama, Potala was rebuilt. The Thirteenth Dalai Lama extended it to its present size. The monastery like palace, reclining against and capping Red Hill, was the religious and political center of old Tibet and the winter residence of Dalai Lamas. It is more than 117 meters (384 feet) in height and 360 (1180 feet) in width, occupying a space of 90 thousand square meters. Potala comprises both the White Palace and the Red Palace. The former is a secular building while the latter is sacred.

The White Palace contains offices, dormitories, a Buddhist seminary and a printing house. From the east entrance which is decorated with paintings of the Four Heavenly Kings, a broad corridor upwards leads to the Deyang Shar courtyard, which where Dalai Lamas would watch operas. Around this large open courtyard, there was a seminary and dormitories. West of the courtyard is the White Palace. Inside there are three ladder stairways, the central one being exclusively for the Dalai Lamas and central government magistrates dispatched to Tibet. In the first hallway, there are huge murals depicting the construction of Potala Palace and Jokhang Temple as well as the procession of Princess Wencheng arriving in Tibet. On the south wall, visitors will see an edict signed with the Great Fifth's hand print. The White Palace houses both the political headquarters and Dalai Lamas' living accommodation. The West Chamber of Sunshine and the East Chamber of Sunshine form the top story of the White Palace. These belonged to the Thirteenth Dalai Lama and the Fourteenth Dalai Lama respectively. Beneath the East Chamber of Sunshine is the largest hall in the White Palace and it was here that the Dalai Lamas were enthroned and ruled Tibet.

The Red Palace was constructed after the death of the Fifth Dalai Lama. The center of the complicated Red Palace is the Great West Hall, which records the Great Fifth Dalai Lama's life by its fine murals. The scene of his visit to Emperor Shunzhi in Beijing in 1652 is extraordinarily vivid. It also has finely carved columns and brackets. The hall has four additional chapels. The West Chapel houses three gold stupas of the Fifth, Tenth and Twelfth Dalai Lamas', in which their mummified and perfumed bodies are preserved. Of the three, the Fifth Dalai Lama's stupa is the biggest. It is made of sandalwood, covered with gold leaf and decorated with thousands of diamonds, pearls, agates and others gems. Standing 14.86 meters (49 feet) high, it is covered by more than 3,700 kilograms of gold. The North Chapel contains statues of Sakyamuni, Dalai Lamas and Medicine Buddha, and stupas of the Eighth, Ninth and Eleventh Dalai Lamas. Against the wall is Tanjur (Beijing edition), a most important Tibetan Buddhist sutra sent to the Seventh Dalai Lama by Emperor Yongzheng. In the East Chapel a two meters (6.5 feet) high statue of Tsong Khapa, the founder of Gelugpa which is Dalai Lama's lineage, is enshrined and worshipped. In addition, about 70 famous adepts in Tibetan Buddhism surround him. The South Chapel is where a silver statue of Padmasambhava and 8 bronze statues of his reincarnations are enshrined. On the floor above, there is a gallery which has a collection of 698 murals, portraying Buddhas, Bodhisattvas, Dalai Lamas and great adepts and narrating jataka stories and significant Tibetan historical events. To the west of the Great West Hall is located the Thirteenth Dalai Lama's stupa hall. Held in the same high regard as the Great Fifth, building of the stupa commenced after his death in the fall of 1933. The work took three years to complete and the stupa is comparable with that of the Great Fifth. It is 14 meters (46 feet) in height, coated with a ton (2200 pounds) of gold foils. In front of it is a mandala made of more than 200,000 pearls and other gems. Murals in the hall tell important events in his life, including his visit with Emperor Guangxu. The highest hall of Potala was built in 1690. It used to be the holy shrine of Chinese Emperors. Dalai Lamas would come here with his officials and high lamas to show their respects to the central government annually before.

Dharma Cave and the Saint's Chapel are the only structures left which were built in seventh century. They both lie central of the Red Palace. Dharma Cave is said to be the place where King Songtsen Gampo proceeded his religious cultivation. Inside the cave, statues of Songtsen Gampo, Princess Wencheng, Princess Tritsun and his chief ministers are enshrined. In the Saint's Chapel above Dharma Cave, Chenrezi, Tsong Khapa, Padmasambhava, the Fifth, Seventh, Eighth and Ninth Dalai Lamas are enshrined and worshipped. Visitors may find a stone with a footprint that was believed left by the infant Twelfth Dalai Lama.