Ludwig already knew the area around Linderhof from his youth when he had accompanied his father King Maximilian II of Bavaria on his hunting trips in the Bavarian Alps. When Ludwig II became King in 1864, he inherited the so-called Königshäuschen from his father, and in 1869 began enlarging the building. In 1874, he decided to tear down the Königshäuschen and rebuild it on its present-day location in the park. At the same time three new rooms and the staircase were added to the remaining U-shaped complex, and the previous wooden exterior was clad with stone façades. The building was designed in the style of the second rococo-period. Between 1863 and 1886, a total of 8,460,937 marks was spent constructing Linderhof.

Although Linderhof is much smaller than Versailles, it is evident that the palace of the French Sun-King Louis XIV (who was an idol for Ludwig) was its inspiration. The staircase, for example, is a reduction of the famous Ambassadors staircase in Versailles, which would be copied in full in Herrenchiemsee. Stylistically, however, the building and its decor take their cues from the mid-18th century Rococo of Louis XV, and the small palace in the Graswang was more directly based on that kings Petit Trianon on the Versailles grounds.[2] The symbol of the sun that can be found everywhere in the decoration of the rooms represents the French notion of absolutism that, for Ludwig, was the perfect incorporation of his ideal of a God-given monarchy with total royal power. Such a monarchy could no longer be realised in Europe in the second half of the nineteenth century. The bedroom was important to the ceremonial life of an absolute monarch; Louis XIV of France used to give his first (lever) and last audience (coucher) of the day in his bedchamber. In imitation of Versailles, the bedroom is the largest chamber of Linderhof Palace. By facing north, however, the Linderhof bedroom inverts the symbolism of its Versailles counterpart, showing Ludwigs self-image as a "Night-King."