Built in the 1860s, the mansion was the residence of Syed Mohamed Alatas, a wealthy merchant of Arab-Acehnese descent and a powerful leader of the Red Flag secret society. He was a central figure during the 1867 Penang Riots and was highly influential in the regional pepper trade. The architecture is described as "Straits Eclectic," integrating European neoclassical elements with traditional Malay and Indian-Muslim stylistic touches. In the late 20th century, the building fell into disrepair but was meticulously restored in the 1990s as part of a pilot project to showcase heritage conservation in George Town. For many years, it served as the Penang Islamic Museum, housing exhibits on the history of Islam in the region and the hajj pilgrimage.