The building of the Castle was started by the third Viscount Palmerston, M. P., (Foreign Secretary and later Prime Minister of the United Kingdom). The first site chosen was on nearby Dernish Island but after several attempts it was found impossible to build a causeway from the mainland to the island owing to the heavy tides running.
The present site was then chosen and the building of the Castle started. The architect of the Castle was J Rawson Carroll, F. R. I. A. Lord Palmerston also built the Harbour at Mullaghmore, and a row of fishermen's cottages on the hill overlooking the harbour. At that time the estate exceeded 6000 acres and included the whole of the Mullaghmore Peninsula.
The Castle was built almost entirely of stone brought by sea from Donegal, the stonemasons being paid a penny half-penny an hour. Lord Palmerston died in the year 1865, before the Castle was completed. The Irish Estate was left to his stepson the first Lord Mount Temple (William Cowper Temple) who only completed the building of the Castle in 1874.
When the first Lord Mount Temple died the Estate was inherited by his nephew The Honourable Evelyn Ashley, son of the 7th Earl of Shaftesbury (the great Victorian philanthropist), who was succeeded by his son Colnel Wilfrid Ashley, M. P., who later became the second Lord Mount Temple, and was the father of Edwina Ashley. In 1922 she married Lieutenant Lord Louis Mountbatten, Royal Navy, who after the Second World War was created Earl Mountbatten of Burma.
Up to the time of the Irish Rebellion, Classiebawn Castle was used extensively by the owners as a shooting lodge in winter, and for fishing and holidays in the summer. The shooting rights are still owned by Lord Mountbatten, the boundaries being shown in the large scale map at the Castle.
The Castle became a favourite childhood holiday home of Edwina (Countess Mountbatten of Burma) and her sister, Mary (Lady Delamere).
During the Irish Rebellion the Castle was commandeered and used as a barracks for the Free State Army, who flew their flag there and protected the Castle from damage. In 1916 Lord Mount Temple removed all the furniture and the Castle remained empty until 1950. When the Rebellion ended, the Castle was handed back intact to Lord Mount Temple who had been a popular landlord, but the agricultural land was not handed back.
Until 1948 lighting in the Castle was by oil lamps and candles; and fresh water had to be carted by donkey a quarter of a mile uphill to the Castle from a spring well. Rain water was collected from the Castle roof and fed to a large underground tank, and when required pumped by a heavy hand wheel to gravity tanks in the roof. There was only one old fashioned bath in the Castle.
After World War II, Lord and Lady Mountbatten decided to re-occupy, modernise and improve the Castle; this was started in 1947. An electric light plant was installed, and a petrol pump at the spring well, and the water pumped to the Castle. The rain water hand was replaced by an electric pump and the Castle completely renovated and redecorated. Many improvements were made in kitchen and staff quarters. The work was finished in 1949. In 1960 the the electric light plant was scrapped when main electricity was laid on. In 1965 mains water was piped to the Castle.
Since 1950 the Mountbatten family have spent most of their holidays at Classiebawn Castle as often as circumstances have permitted.