Following Cahawba and Tuscaloosa, Montgomery became Alabama's permanent capital city. Spurred by Alabama’s expansion, in 1846 the state legislature chose Montgomery as the new capital city moving it from Tuscaloosa in the west-central part of the state.

Andrew Dexter, for whom Montgomery’s famed Dexter Avenue is named, was one of the earliest promoters for the new site. He had reserved a portion of his property known as “Goat Hill” for the location of the new state house. One of the major points in the town’s selection was the cession of Creek lands that moved the boundary of Alabama eastward, placing Montgomery close to the state’s geographic center. Other factors included the developing railroads, the free land, and the funds the city would raise to finance the building’s construction.

Philadelphia architect Stephen Button designed the first building that was completed in 1847. It burned to the ground in 1849. In 1851, the present capitol, also in the Greek Revival style, was constructed on the previous building’s foundations. Builder and industrialist Daniel Pratt may have helped a committee design the building. African American master carpenter Horace King executed much of the woodwork, including, most likely, the three-story spiral stairways that dominate the entrance hall. The state has expanded the building three times: 1885 rear wing; 1906-1912 side wings; 1992 rear wing extension

The building housed all three branches of state government until 1940; at that time the Supreme Court moved to a separate building on Dexter Avenue. The legislature continued to meet in the capitol until moving to the Alabama State House in 1985. In 1992, following a seven-year restoration and renovation by the Alabama Historical Commission, the governor and other executive branch officers returned to the capitol. Areas open to the public include the restored House of Representatives, senate chamber, old Supreme Court chamber and library, and the rotunda.