Alexander Menshikov (1673-1729) was a good friend and companion of Peter the Great. He came from a very humble background, but was quickly promoted by Peter to become a duke (1707) and the Governor General of St. Petersburg. Under his supervision the Peter and Paul Fortress and the fort of Kronshlot (now Kronshtadt) in the Gulf of Finland were built. Being the Governor General, he commissioned a large palace on Vasilievsky Island, where he lived until 1727. The palace was the most luxurious house to be built in the city thus far (far superior to the Summer Palace of Peter the Great) and was therefore chosen to host various official functions.
After Peter's death in 1725, Menshikov did his best to ensure that the throne would pass safely to Peter's wife Catherine I. For two years Menshikov effectively ruled the country. In 1727, a few weeks before his daughter's marriage to the heir to the throne, Menshikov was accused of treason and stealing government money and was exiled with his whole family to Siberia.
Between 1732 and 1918 the palace was home to a military school, but in 1967 it was given to the Hermitage. Now, with the early 18th century interiors restored, it houses a collection of Russian cultural artifacts from the early 18th century.