The Lal Darwaza was built in 1447 by Queen V.V. Rajye Bibi, the wife of Muhammad Shah Sharki, and was dedicated to the saint Sayid Ali Dawood Kuttubudin.

The stones used in the construction of the mosque were red sandstone bought from Varanasi. These stones were taken from demolished temples in the city. Lal Darwaza Masjid also housed the palace of the Queen, and she used it as her private prayer mosque. Bibi Rajye established a religious school here, also called an Islamic madrasa, to impart religious knowledge of the Quran and other Muslim sacred texts. The madrasa still exists today and continues to educate the people living nearby.

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The mosque stands in Mohollah Namaz Gah, also known as *Al-Jamia-Tul-Husania*. Later, it became a center of Islamic education, where Muslim girls were also given *taleem* (education).

The mosque has three gateways, with the eastern gate being the main and largest gate. This is a very famous monument in the city and is a major tourist attraction. It is a place that keeps the Islamic heritage of this city alive and thriving.