The Royal Monastery of Saint Isabel is situated on a large corner plot close to Atocha. It accommodates two foundations, a girls school founded by Philip II and an enclosed convent of Augustinian Recollects nuns founded by the wife of Philip III, Margaret of Austria.

Juan Gómez de Mora was responsible for the architecture of the church in the middle of the 18th century.

Pillaged by French troops, the nuns did not return there until 1816. It suffered a fire at the start of the Civil War and works of art were destroyed. It was rebuilt in 1946 with the sale of some artistic pieces saved by the nuns before the conflict. Although the works of art that were in the temple disappeared in 1936, those of the cloister still remain, with important sculptures and paintings from the 17th and 18th centuries, especially those by Salvador Maella and Vicente Carducho.

In 1995, the Monastery of Santa Isabel was declared Cultural Heritage in the monument category. It is currently managed by National Heritage.