The mansion was built at the end of 1780. Its owner was the city councilor and the mayor Mateo Pedroso y Florencia, one of the most influential figures of the colonial government. The building is considered one of the most representative and best-preserved Havanan residencies of the time. The ground floor was occupied by shops. The servants were living on the mezzanine, while the owners were using the upper floor as their residence. The number of the slaves that live in the house, were attracting notice; according to the Countess of Merlin (María de las Mercedes Beltrán Santa Cruz y Cárdenas Montalvo y O'Farrill) that lived here in 1842, as mentioned in her letters, more than hundred African slaves were accommodating in the manor. In 1854 the house was occupied by the Royal Audience (a kind of Supreme Court, being created by a royal decree of Fernando V of Castle, issued in 1511). In 1897 it became the Police Headquarters. At the beginning of the 20th century it became a tenement house. In 1938 it was carefully restored by the architect Joaquín E. Weiss, and Francisco de Paula Peñalver y Pedroso, a descendant of the first owner, took the possession of the building. Soon, it was refurbished for its present role as a recreational, commercial, historical and cultural complex, where in plenty of shops handmade goods, cigars, cigar related products, rums are sold, as it is typical in Havana.

The Baroque-style building looks out onto the Havana bay. It has a sober façade with a wooden, Moorish type balcony. 32-meters long, continuous balcony is one of the longest, built in Cuba. All the carpentry at the façade is painted in blue, as usual in other colonial mansions in Havana. Similar to other buildings of the time, it has a central courtyard and a backyard. The spacious inner courtyard is surrounded by four galleries with wooden balustrades, and large stone columns, supporting arches. The stones, used in the construction, have the same origin with the stones, used to build the Castle of San Carlos de Cabaňa.

Today the Palacio de la Artesanía is dedicated to the trade of tobacco, rum, coffee, souvenirs, confections, perfumes, musical instruments, woodcrafts, textiles (including famous Cuban guayaberas), jewelry, among others. In the shops in the courtyard and upstairs, tourists can choose from a huge variety and at good prices, without having to bargain. In the patio or on the terrace, you can relax, by tasting some sandwiches and refreshing drinks, and listen to live music of different groups (for example, Habana Compás Dance).