The Diwan-i-Khas (‘hall of private audience’) with openings of engrailed arches on its sides consists of a rectangular central chamber surrounded by aisles of arches rising from piers. The lower parts of the piers are inlaid with floral designs, while the upper portions are gilded and painted.

The present wooden ceiling of the hall was painted in 1911. The four corners of its roof are surrounded by pillared chhatris.

Over the marble pedestal in its centre stood the famous Peacock Throne which was removed in 1739 by Nadir Shah. Through the centre of the hall flowed the Nahr-i-Bihisht. Over the corner arches of the northern and southern walls below the cornice is inscribed the famous verse of Amir Khusraw exclaiming ‘if there be a paradise on the earth, it is this, it is this, it is this’.

The hall was used by the emperor for giving private audience to the selected courtiers and visitors. Originally there existed on the west of the Diwan-i-Khas two enclosures, one for the nobles and the other for those who were not of a very high rank. These enclosures were removed after the Mutiny. During the Mutiny, Bahadur Shah II held court in the Diwan-i-Khas.