The hotel was the dream of prominent business man Jamsetji N. Tata. The hotel opened December 16, 1903.
It was designed by Indian architects Vaidy and Mirza. The project was completed by English engineer Chambers. The architecture reflects a mixture of Moorish, Oriental and Florentine Styles. The cost of construction was ₤250,000.
The Tower, designed by Bekker, was added in 1973. The interior of the Tower was designed by Swiss designer Keller.
The hotel was the first in India to use a steam driven elevator. In World War I the hotel was used as a 600-room hospital.
On November 26, 2008 The Taj Mahal Palace and Towers was one of the targets of a large terrorist attack in Mumbai. The attacks are attributed to the Pakistani based Lashkar-e-Taiba. The hotel reopened on December 21, 2009.
The hotel has hosted many familiar names, such as: The Beatles, Jacqueline Kennedy Onassis, Mick Jagger and Hillary Rodham Clinton.