Located at the foothills of the Aurangabad Caves, this palace was built by a Bundelkhand chief, who accompanied Mughal emperor Aurangzeb into the Deccan region. It was built between 1651 and 1653 AD and converted into a museum in 1979. Prominent exhibits include remnants from regional palaces, antiques, coins, ancient pottery, paintings, reliefs and sculptures found during local excavations.