The name Ciragan derives from the Persian word "cerag", meaning torch. The area in which the palace is located was called as Ceragan because of the
famous Ottoman festivities which were held in tulip gardens decorated with torches in the evenings, this was known as Çiragan Festivals. The palace was built during the reign of sultan Abdulmecit and was designed by the Armenian architect, Nigogos Balyan. The building was constructed on the European shores of the Bosphorus, between Besiktas and Ortaköy neighborhoods, using financial loans obtained for restructuring the water system of Istanbul and the construction of a new railway. The construction took about 12 years. This was the last palace built by the Ottoman Empire for the royal family.
The main building was destroyed by a fire in 1910 which broke out in the central heating vents, leaving only the exterior walls from the structure. However, it was renovated in the 90's and with the addition of a modern hotel building the palace was converted into a luxury hotel, becoming one of the Leading Hotels of the World under the management of international hotel chains of Kempinski. Today, it's the most expensive hotel in Turkey.
The other surviving buildings of the complex are being used as schools today. There is also a fine restaurant inside the palace section which is overlooking the Bosphorus.