The Palatine Hill was the most suitable of the 7 hills of Rome for human settlement. It was near the Tiber, yet not adjoining the river, and it controlled the only possible ford for crossing it, at the Tiber Island, the island in the river.

There is a legend which tells of an ancient Greek settlement here, originating from the Arcadia of King Evandros.
This probably arose from the comings and goings of Greek sailors and merchants in the cattle market below the hill.
Another legend has it that Romulus's house was on this hill, a hut situated on the south-west corner, the corner near the river, where recent excavations have in fact brought to light the remains of a hut.
Rome's longest standing rituals and festivals were linked to this hill. The Lupercalia is an example: this fertility rite was linked to the legend of the she-wolf and therefore to the very origins of Rome. Priests dressed in goatskins left from their sanctuary at the foot of the hill and, as they made a circuit of the hill side, they whipped whoever came within their range, especially the women.
Throughout the imperial age, triumphal processions began with the chariot of the victor setting off from the Altar of Hercules at the foot of the Palatine; it then made a circuit of the Circus Maximus, ran along the Palatine towards the Roman Forum and from there the victor went up to the Capitoline Hill.
During the Republic, the Palatine became the residential area of the ruling class and the remains of houses belonging to this period have been discovered below the imperial palaces. The Emperor Augustus was born on the Palatine and decided to build his residence there, on the spot closest to Romulus's house. After Augustus, Tiberius, Nero, the Flavian emperors, and Septimius Severus all constructed their palaces here.
By the end of the Imperial Age, the Palatine was one huge building, hence the name "Palatium" came to mean simply "palace", not referring just to the Emperor's palace but simply to describe a grand, noble residence, and the word with this meaning is used in all the European languages.