The construction of the Grand Palace began on 6 May 1782, at the order of King Buddha Yodfa Chulaloke (Rama I). Having seized the crown from King Taksin of Thonburi, King Rama I was intent on building a capital city for his new Chakri Dynasty. He decided to move the seat of power from the city of Thonburi, on the west side of the Chao Phraya river, to the east side at Bangkok. The new capital city was turned into an artificial island when canals were dug along the east side. The island was given the name 'Rattanakosin'. The previous royal residence was the Derm Palace, constructed for King Taksin in 1768.
The new palace was built on a rectangular piece of land on the very west side of the island, between Wat Pho to the south, Wat Mahathat to the north and with the Chao Phraya river along the west. This location was previously occupied by a Chinese community, whom King Rama I had ordered to relocate to an area south and outside of the city walls; the area is known today as Yaowarat (Chinatown).
Desperate for materials and short on funds, the palace was initially built entirely out of wood, its various structures surrounded by a simple log palisade. On 10 June 1782, the king ceremonially crossed the river from Thonburi to take permanent residence in the new palace. Three days later on 13 June, the king held an abbreviated coronation ceremony, thus becoming the first monarch of the new Rattanakosin Kingdom. Over the next few years the king began replacing wooden structures with masonry, rebuilding the walls, forts, gates, throne halls and royal residences. This rebuilding included the royal chapel, which would come to house the Emerald Buddha.To find more material for these constructions, King Rama I ordered his men to go upstream to the old capital city of Ayutthaya, which was destroyed in 1767 during a war between Burma and Siam. They were tasked with the dismantling and removal of as many bricks as they could find, while not removing any from the temples. They began by taking materials from the forts and walls of the city; by the end they had completely levelled the old royal palaces. The bricks were ferried down the Chao Phraya by barges, where they were eventually incorporated into the walls of Bangkok and the Grand Palace itself. Most of the initial construction of the Grand Palace during the reign of King Rama I was carried out by conscripted or corvée labour. After the final completion of the ceremonial halls of the palace, the king held a full traditional coronation ceremony in 1785. The layout of the Grand Palace followed that of the Royal Palace at Ayutthaya in location, organization, and in the divisions of separate courts, walls, gates and forts. Both palaces featured a proximity to the river. The location of a pavilion serving as a landing stage for barge processions also corresponded with that of the old palace. To the north of the Grand Palace there is a large field, the Thung Phra Men (now called Sanam Luang), which is used as an open space for royal ceremonies and as a parade ground. There was also a similar field in Ayutthaya, which was used for the same purpose. The road running north leads to the Front Palace, the residence of the Second King of Siam.