Just northwest of the Igreja de São João is the 17th-century facade of a much older palace and castle, as revealed by the two powerful square towers that bracket it. The Palácio Cadaval was given to Martim Afonso de Melo, the governor of Évora, by Dom João I, and it also served from time to time as a royal residence. Today the rooms contain a collection of illuminated manuscripts, Arraiolos carpets and 18th-century paintings of Portuguese royals.
A section of the palace is still in use as the private quarters of the de Melo family.