Shey palace was built in 1645 by Deldon Namgyal as a summer residence for the kings of Ladakh. It is the oldest palace in Ladakh and above the palace is an even older ruined fortress. From the palace one can get the views of the ranges in the south to the Thiksey gompa and in the west to the Zanskar moutain ranges. Hundreds of chortens of all shapes and sizes stand below the palace and gompa. These chortens demonstrate the interest taken by the Ladakhi kings and queens who succeeded Shey's builder. In 1655, in memory of his father, this same king built the two-storey Shey gompa adjacent to the palace. In this gompa he installed a two-storey high image of the seated Buddha. Presently, there are only two caretaker lamas in residence. After entering the central courtyard located on the second storey of the gompa, a large seated Buddha is found in the room to one's right. The seated Buddha is 12 meters high and worked of copper sheets gilded with gold. This Buddha is the biggest metal statue in the region and was the largest Buddha statue of any type in Ladakh until Thiksey gompa installed a 15 meter tall Buddha made of clay in 1970.

Shey's Buddha statue was made in 1655 by a Nepalese sculptor who was assisted by three Ladakhi craftsmen. The castings of the statue were made in Leh while copper was collected in Zanskar and hammered into plates on big rocks. More than five kilos of gold were then used to plate the copper. The statue was built in parts in the Zanstil Palace (Zans means copper and til means "to hammer") in Leh and then transported to Shey where it was assembled and installed. Sacrificial offerings such as grain, jewels, holy signs and mantras are contained inside the figure.

The most important moment in the construction of the Buddha figure is when the eyes are painted on, for this is the moment when the statue can "see". For this reason, the artist or monk will paint in a Buddha's pupils over his shoulder, with his back to the idol, for none would dare to look the Buddha in the eye. The upper storey contains munerous murals on the walls. When facing the Buddha, the wall on the left is painted black and decorated with skulls. The wallson both sides depict the 16 Arhats (Worthy Ones who have achieved Nirvana), 8 on each side. The wall behind the Buddha has images of his two chief disciples, Sariputra and Maudgalyayana of Padme Sambhava, an 8th century Indian translator of Buddhist texts into Tibetan and Tsong-kha-pa, founder of the yellow-hat sect of Tibetan Buddhism. To the right of the Buddha are statues of Padme Sambhava in the center, Dogzang Guru Limbune on either side and two chortens. Directly in front of the Buddha, to the right, is a statue of a blue horseman, Paldon Lamo and to the left is a statue of the red horseman of Chakmen, representing the king of Ladakh. Also in front of the Buddha is a large bowl of wax with a central flame that burns for one year before being replaced. This flame represents divinity and purity and is present in front of all Buddha statues in the Ladakh region. The lower storey of the gompa has a large library of old books. The walls are painted with murals of Buddha figures with the various hand gestures - that of preaching, teaching, blessing and "earth witness".