Khaplu Palace — known locally as Yabgo Khar, the residence of the raja — perches on a rocky spur above the town, commanding views up the Shyok and Hushe valleys toward the Karakoram peaks. The structure is a mix of timber, stone, and mud-brick typical of Balti vernacular architecture, with elaborate carved balconies and latticed wooden screens on the upper floors.
The palace was the seat of the Yabgo dynasty, the hereditary rulers of Khaplu, until the region was incorporated into Pakistan. It fell into disrepair through the 20th century before a major restoration by the Aga Khan Trust for Culture in the 2000s. Part of the complex now operates as a heritage hotel, but the main public areas and the garden are open to visitors during daylight hours. The climb up from the bazaar takes about fifteen minutes and the views from the upper terrace are the best in the valley.