The area, historically known as the Corral de los Cautivos (Prisoners’ Yard), once held Christian prisoners in Arab dungeons. During the conquest of Granada in 1492, it was from this location that Boabdil, the last Nasrid sultan, departed to surrender the city to Queen Isabel I. In honor of the Christian martyrs, Isabel ordered the construction of a chapel on the hill, which later became a Carmelite convent in 1573. Saint John of the Cross served as prior between 1582 and 1588, during which time he wrote much of his work, planted trees, and helped construct the aqueduct on the grounds.

The convent was destroyed in 1842, during the Mendizábal confiscation, and the property passed into private hands. One of its most influential owners was the Belgian engineer Humbert Meersmans de Smet, who, in 1891, transformed the pond into a romantic lake, added islands and waterfalls, and beautified the gardens with sculptures and mazes. In 1943, the Carmen de los Mártires was declared a Cultural Heritage Site (BIC) in the category of Historic Garden.

After passing through several owners, the Carmen was finally donated to the City of Granada in 1958 by Cristina de Arteaga, its last private owner. Although it experienced a period of neglect and was threatened by an urban development project in the 1970s, public pressure prevented its destruction. In 1986, the mansion was restored and opened to the public.