The first stone residential quarters in the royal palace, later called the Terem Palace, were built withinin the period from 1635 till 1636 for Czar Mikhail Fedorovich by the masters of stone works Bazhen Ogurtsov, Antip Konstantinov, Trefil Sharutin and Larion Ushakov. The basis for the newly erected three-storey chambers was the lower tier of the northern part of the palace built by Aleviz from 1499 till 1508 and Workshop chambers raised above it during the latter half of the XVI century.
Russian wooden architecture has affected the tiered construction of the volume of the new structure with open arcades, pads, porches and stairs. Nevertheless, for its time it was a new type of a multi-storey stone residential building, which enfilade layout became characteristic for later palaces.
Three open ground-floor arcade galleries surrounded the palace on the tiers: the lower Boyar platform, or the Postelnoe (Bed) Porch was located at the level of overlapping of the Alevizovsky basement, where now the Vladimirsky Hall of the Grand Kremlin Palace stands. From this level an open staircase was leading to the Front stone courtyard arranged at the top of the equalized arches of the Masters’ Chambers, above which the three floors of the Terem Palace has been raised. Later the exit to the middle arcade was closed by the Golden crate, which represents a unique example of blacksmith's skill. From the east side of Terems the Front golden porch has been located, serving as an ascend to the second floor into the Czar's living quarters. The last tier of the erected chambers - the golden-tiled Teremok located in the center of the building is surrounded by the third platform - the Upper stone courtyard.
Unusual picturesqueness and elegance of the new palace is created not only due to the complex space planning decision of the building, but also due to the rich decorative design of its facades. Profiled pilasters between the windows, carved and majolica moldings, complex white stone frames of the apertures with hanging weights and triangular pediments, covered with carved ornament, tiles and carvings in the parapet brickworks of arcades, gilded roof - all this harmoniously fits with the polychrome painting of the walls and white stone details restored during renovation of Terems from 1966 till 1969. In general, the palace gives the impression of a precious jeweler's work.
The original interior decoration of the chambers, with the exception of certain fragments, has not been preserved and was again executed under the guidance of artist F.G. Solntsev in the style of the XVII century. These works were conducted within the period from 1836 till 1837 during restoration of an ancient monument, included later in a new complex of palace buildings, when constructing the Grand Kremlin Palace.
Currently the Terem Palace as a part of the Grand Kremlin Palace serves as the Residence of the President of the Russian Federation.