The Castle Hotel, known from 1907 until 1934 as the Governor's Mansion, and subsequently as the Qingdao Guest House, has been a landmark of Qingdao for the last hundred years.Construction on the extraordinary Governor's Mansion began in 1905 and was finished in 1907. It was built in the then popular Jugendstijl or Art Nouveau style, and covers an area of over 4,000 square meters.The delicate shape, splendid ornaments, graceful lines and bold colors make the Governor's Mansion one of the best examples of German Imperial architecture anywhere in the world.

In 1934, the named was changed from the Governor’s Mansion to the Qingdao Guest House. The Guest House subsequently became an important retreat to receive Chinese and international military and political VIPs from around the world.

The current perimeter of the Guest House was established with and area of 86,000 square meters in 1957. A multitude of fruit and hardwood trees were planted, giving the Guest House a rustic and secluded feel.

In 1996, the Qingdao Guest House was listed as an important national cultural monument under the protection of the Bureau of Culture.

The Guest House was turned into a museum open to the public from May 1, 1999. The Guest House has been honored as a Class AAAA national tourism monument in 2008.

In 2008 the Castle Hotel established the first true boutique hotel in Qingdao. Located within the grounds of the Governor Mansion, the Castle Hotel combines classical architecture with modern art and is one of the most unique hotel properties in China.