The site of Kinkaku-ji was originally a villa called Kitayama-dai (北山第), belonging to a powerful statesman, Saionji Kintsune. Kinkaku-ji's history dates to 1397, when the villa was purchased from the Saionji family by shōgun Ashikaga Yoshimitsu and transformed into the Kinkaku-ji complex.When Yoshimitsu died the building was converted into a Zen temple by his son, according to his wishes. During the Ōnin war (1467–1477), all of the buildings in the complex aside from the pavilion were burned down.

On 2 July 1950, at 2:30 am, the pavilion was burned down by a 22-year-old novice monk, Hayashi Yoken, who then attempted suicide on the Daimon-ji hill behind the building. He survived, and was subsequently taken into custody. The monk was sentenced to seven years in prison, but was released because of mental illnesses (persecution complex and schizophrenia) on 29 September 1955; he died of tuberculosis in March 1956. During the fire, the original statue of Ashikaga Yoshimitsu was lost to the flames (now restored). A fictionalized version of these events is at the center of Yukio Mishima's 1956 book The Temple of the Golden Pavilion, and another in the ballet RAkU.