The first property on this site was built in 1689 by Wigand Michelbecker, an influential merchant. In 1743-44 Nicolai Eigtved demolished parts of the building and expanded it to accommodate Crown Prince Frederik V and Crown Princess Louise. The result was one of the finest rococo buildings in Denmark. Paris was clearly the inspiration for the palace, which is set back from the street behind a low gatehouse wing. Inside, the palace was equally impressive, especially the banquet hall and audience chamber. In the 1760s, a modernisation project was carried out by C.F. Harsdorff and the palace gained its nickname, the Prince's Palace, from Prince Carl of Hessen-Kassel. Since 1894, it has housed the National Museum of Denmark.
In the summer of 1716, Tsar Peter the Great and Queen Catharina arrived in Copenhagen. They had travelled from North Germany with an army of Russian auxiliary troops as King Frederik IV's allied forces in the Great Nordic War. The Tsar's objective was to convince the Danish king to mount a fast attack on Sweden. The Tsar and his retinue were lodged in Edinger's house, the present Prince's Palace, where they spent the summer in negotiations regarding whether or not the campaign would take place. The Russian troops camped outside the city, which rather concerned the locals. The attack on Sweden never materialised, but the palace resembled a battlefield by the time the guests left. When the Russians needed firewood, they simply broke up and torched the exquisite furniture! The unfortunate owner demanded more than 5,000 rix-dollars in compensation from the royal family but was fobbed off with only 1,000.