It was first constructed in 1216 A.D. by Lama Gyalwa Lhanangpa where Dechen Phodrang now stands above Thimphu. In 1641 Zhabdrung Ngawang Namgyal acquired it but finding it too small, he built another one, known as the lower Dzong. The original dzong was destroyed by fire in 1771 and everything was moved to the lower dzong. The new building was later expanded several times over the years. It was damaged during an earthquake in 1897 and rebuilt in 1902. King Jigme Dorji Wangchuck had it completely renovated and enlarged over five years after he moved the capital to Thimphu in 1952 in traditional style using neither nails nor written plans.
Tashichho Dzong has been the seat of the government since 1952 and presently houses the throne room and offices of the king, the secretariat and the ministries of home affairs and finance. Other government departments are housed in buildings nearby.
The dzong is located close to Thimphu town, next to the banks of the Wangchhu River. It is an impressively large structure, surrounded by well-kept lawns and beautiful gardens.