The original Thimphu dzong (the Do-Ngön Dzong, or Blue Stone Dzong) was built in 1216 by Lama Gyalwa Lhanapa (1164-1224), founder of the Lhapa branch of the Drikung Kagyu, at the place where Dechen Phodrang monastery now stands on a ridge above the present Tashichö-dzong. In 1641 Shabdrung Ngawang Namgyal took over that Dzong from the Lhapa Kagyu, reconsecrated, and renamed it Tashichö-dzong. It was then established as the main seat of the Southern Drukpa Kagyu and the summer residence of the monastic body or sangha headed by Shabdrung Rinpoche. Most of this original dzong was destroyed by fire in 1772 and a new dzong was built at the present site by the sixteenth Desi, Sonam Lhudrup, and it was then consecrated by the thirteenth Je Khenpo, Je Yonten Taye, who named the new Dzong Sonamchö-dzong. Following the death of the Desi it was renamed Tashichö-dzong after the old Dzong.
Tashichö Dzong was again destroyed by fire three different times as well seriously damaged by an earthquake. Each time it was rebuilt by the Desi and Je Khenpo of the time. In 1962, after the capital was moved from Punakha to Thimphu, the present Dzong was rebuilt by the third king, Jigme Dorji Wangchuk, as the seat of Government following a different plan from the old one. Only the central Utse tower, the Lhakhang Sarp (new temple), and main Gönkhang (protector temple) remain from the earlier Dzong. After its completion in 1968, the new Tashichö Dzong was consecrated by the 66th Je Khenpo Yonten Tarchin; the 16th Karmapa, Rangjung Rigpai Dorje; and Je Kudre, Jamyang Yeshe.
Tashichö Dzong has been the seat of Bhutan’s government since 1968. It presently houses the throne room and offices of the king, the cabinet secretariat and the ministries of home affairs and finance. Some other government departments are housed in buildings to the south of the Dzong, and others in new buildings in Thimphu. West of the dzong is a small tower of Ney Khang Lhakhang which houses a statue of Shakyamuni Buddha and protective deities.