Si Musa was descended from a family of black slaves which served the Moroccan makhzen (royal government) and reached the highest offices in the country.[1][2] He was first hajib (similar to a chamberlain) then grand vizier under Muhammad ibn Abd al-Rahman, who reigned from 1859 to 1873. He began the construction of the palace in 1859 and continued during the 1860s.[3][4] Today, the "Grand Riad" or large riad garden and its adjoining rooms in the northern part of the palace date from Si Musa's time and are also consequently known as the Dar Si Moussa.[5][6][7] The two grand chambers on the east and west sides of the garden contain an inscription which dates their construction to 1866-67.[7]

Ba Ahmed ibn Musa (known simply as Ba Ahmed) was hajib to Sultan Moulay Hassan and, upon the latter's death, ensured his son Abdelaziz's accession to the throne in 1894, earning him a promotion to grand vizier.[8][7] As Abdelaziz was only sixteen, Ba Ahmed became the effective ruler of Morocco until his own death from disease in 1900.[9][5] He progressively expanded his father's palace throughout these years as grand vizier (1894-1900), adding to it piece by piece as new land became available for purchase.[5][7] During his tenure, he was also supported by his two brothers Si Sa'id and Idris (who died with him in 1900).[5][7] Si Sa'id built his own palace north of here during that time, the Dar Si Said, which today serves as a museum.[5][10]

Ba Ahmed is responsible for constructing most of the Bahia Palace's southern parts, which included various smaller courtyards and riad gardens.[5] On the east side of this palace complex he also created a vast private park and garden, complete with a central water basin and an access point via a bridge over the adjacent street linking it to the palace.[7] His architect was a man named Muhammad ibn Makki al-Misfiwi, originally from Safi, who was born in 1857 and died in 1926.[7][5] The palace's growth overtook much of the previously existing neighbourhood north of the Mellah and resulted in major changes in the local street layout.[7] The growing palace housed Ba Ahmed's servants (including his own slaves) and his harem (private family residence), and the name al-Bahia (Arabic: الباهية), meaning "the Brilliant", was reportedly the name of his favourite wife.[4][3] The entire palace was built on one level, possibly as Ba Ahmed's own physique (which was described as stout and obese) made it more difficult for him to go up and down stairs.[7]

After Ba Ahmed's death his palace became royal property. Mere hours after his death, Sultan Abdelaziz (who subsequently took full power over the country) reportedly ordered the palace to be looted for valuable items.[7][6] In 1908 Madani el-Glaoui, brother of Thami el-Glaoui, took control of the palace and used it to entertain foreign guests.[4] He added an upper floor for the first time to some parts of the palace.[7]: 545  Then, in 1912, after the installation of the French Protectorate in Morocco, the palace was converted into the residence of the French resident-general (Lyautey) in the city.[3][4] After Moroccan independence, the palace was again used as a royal residence for King Mohammed V before being transferred to the Moroccan Ministry of Culture under King Hassan II, which turned it into a tourist attraction.[3]

Today the palace is one of the most visited tourist attractions in Morocco; the government counted 410,141 visitors from January to April 2019, more than any other heritage site in the country.[11] The palace is occasionally still used by the King of Morocco to receive foreign dignitaries or host events.[3][6]

The palace suffered significant damages during the September 2023 earthquake that struck southern Morocco. An early assessment of damage reported, among other things, partial collapses in some of the houses and structures adjoining the palace or located on its grounds, damage to some of the roofs, fissures in some walls, and the collapse of a vaulted ceiling in the Grand Riad.[12][13] The palace was subsequently closed for repairs and was reopened to visitors in October 2023.[14][15]