Soon after the original watchtower and fort were built, the small seasonal settlement already located there began to grow.
Beginning in approximately 1795, during the reign of Sheikh Shakhbout bin Dhiyab (r. 1793-1816) and his immediate successors, work on the fortress as we see it today took place. Two more towers were built and the whole compound was linked with walls to create an imposing defensive enclosure.
It was during this time that Sheikh Shakhbout moved the seat of power from Liwa to Abu Dhabi Island, using the fort as his seat of government, his military headquarters and his home. From then until 1966, Qasr Al Hosn was continuously occupied by the ruling family.
Additional buildings were added to the complex during the 19th century. In the early 1940s, with income earned from the granting of oil concessions, Sheikh Shakhbout bin Sultan Al Nahyan (r. 1928-1966) built the Outer Palace to surround the old fort. In addition to private rooms for the ruling family, the palace added decorative features such as towers, arcades and a courtyard.
In 1966, the late Sheikh Zayed bin Sultan Al Nahyan (r. 1966-2004) moved his family to Al Manhal Palace and used the fort as an administrative building and the original location for the National Archives.