It was built on the northern bank of the River Kotorosl and served a defensive function as well as a religious one. The princes of Yaroslavl also had a residence at the monastery and were buried in its grounds. After the Yaroslavl Principality's incorporation into the Moscow Principality, the monastery became a favourite place of worship of Tsar Ivan the Terrible, who presented the monastery with many precious gifts.
During the Time of Troubles the monastery endured a one-month siege by the Polish interventionists whilst the rest of the city was under occupation. Later the volunteer army of Pozharsky and Minin set up camp in the monastery and stayed there several months until they finally set off to liberate Moscow. Reconstruction work was carried out between 1621 and 1646 to repair the damage inflicted during the Time of Troubles. Much of the monastery's strong defensive walls date from this period. In 1787, upon the establishment of the Yaroslavl Governorate the monastery was used as the archbishop's residence. The monastery was closed in 1918 and was used for various non-religious uses, until it was reorganised as the basis of the Yaroslavl State Historical, Architectural and Artistic Museum-Reserve, usually known as just the Yaroslavl Museum-Reserve. Today the monastery remains a museum as has several permanent exhibitions; tickets for these exhibitions or just a ticket to walk around the monastery, can be purchased at the ticket booths located at the entrances to the monastery. A bear called Masha is also kept inside the museum-reserve. This monastery is occasionally mistakenly referred to as the Yaroslavl Kremlin, which no longer exists.