It was constructed in the ornate wooden style of the great Nord longhouses of ancient days. Visually and politically, it is very much the focal point of the entire city itself and perhaps even Skyrim as a whole. As is true of the keeps in other cities, Dragonsreach serves many important functions.

As the seat of government in Whiterun, Jarl Balgruuf the Greater resides here as its ruler. Dragonsreach is situated in the "Cloud District" of Whiterun and, as the name suggests, it is elevated from the rest of the city. According to the Jarl's steward, Proventus Avenicci, the building gained its name after a battle with a dragon that left the victorious party as "rulers of the clouds".

According to legend, the palace today known as 'Dragonsreach' was originally a smaller building. However, with the intent of creating a prison for the dragon Numinex after its defeat at the hands of Olaf One-Eye, the people of Whiterun added a stone prison to the keep and renamed it Dragonsreach. Though accounts vary on Olaf's position, the dragon's disposition, and the manner in which the dragon was captured, there seems to be little doubt about the history and purpose of the building