It was built between 1653 and 1655 by the architect Juan Maza, as charged by Juan de Valencia el Infante. The original building was a beautiful palace flanked by two towers with spires facing the streets calle de la Almudena and Factor, located in the historic Austrias district.

After this, the building continued to change hands until in 1842, the Dukes of Abrantes bought it and commissioned a major refurbishment by the architect Aníbal Álvarez Bouquel, in order to accommodate the aristocratic tastes of the nineteenth century. After this reform, the façade now presents new entrances on the balconies and a new front door.

Later, the building became the headquarters of the newspaper "Correspondencia de España" until, in 1888, the owners sold it to Italian Government who established their embassy. This was followed by a further renovation under the direction of architect Luis Sanz, in which the towers were demolished, the back wall was opened and the paintings on the top floor of the main façade were created, giving the building its present appearance.

Today it is the headquarters of the Italian Cultural Institute, Italy’s cultural embassy in Madrid, promotes the arts and sciences of Italy. Among the most popular activities with the public the Instituto organises periodically are its cycles of Italian cinema. The programme of activities this institution organises every year is wide-ranging and includes exhibitions, cooking courses and conferences.