The hotel is located on the Hill of Taganana, the site of the Santa Clara Battery, which dates back to 1797. Part of the battery has been preserved in the hotel's gardens, including two large coastal guns dating from the late 19th Century.

The hotel opened as The National Hotel of Cuba on December 30, 1930, operated by the American managers of the Plaza Hotel, Savoy-Plaza Hotel and Copley Plaza Hotel, at a time Cuba was a prime travel destination for people in the U.S.

In 1933, after Fulgencio Batista's 4 September 1933 coup against the transitional government, The National Hotel was the residence of Sumner Welles, a special envoy sent by U. S. President Franklin D. Roosevelt to mediate the crisis. Soon after, on October 2-3, 1933, it was the site of a bloody siege that would become known as the Battle of the Hotel Nacional of Cuba. The conflict pitted officers of the Cuban army, holed up in the hotel, who had been instrumental in the overthrow of Gerardo Machado but opposed Batista, against the non-commissioned officers and other ranks of the Cuban army, who supported Batista. Their successful assault on the hotel left over forty combatants dead and caused extensive damage to the building, including shell and bullet holes.

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