Drago Palace belonged to the noble Drago family. After the disappearance of the Drago family at the beginning of the 19th century, the palace belonged to the city municipality and always had a public purpose; for many years it served as a kindergarten where generations of Kotor children grew up, and just before the 1979 earthquake it was turned into apartments. It is a seat of the Municipal and the Regional Institute for the Protection of Cultural Monuments, since it was spatially divided.