An early Straits eclectic-style double-storey bungalow set in a walled compound located at the junction of Lebuh Armenian and Lebuh Acheh, it was recently restored in a government-funded pilot project and is in the process of being converted into a state Islamic museum. Before it was restored, it was occupied by Indian chettiar scrap dealers and used as a collection yard.

Syed Mohd Alatas was a wealthy Achehnese merchant of Arab descent who traded between Penang and Acheh. He was instrumental in smuggling arms to the Achehnese resistance after the Dutch invaded Acheh in early 1870s.

From the 1860's to the early 20th century, the Syed Alatas Mansion served as the residence of Syed Mohd Alatas and then his son. The Rumah Besar (literally "Grand House") Syed Alatas was the focus of many celebrations, including the annual Boria (a traditional form of choral entertainment) that used to take place during Awal Muharram (Muslim New Year).

From the 1930's until 1993, this site was the collection yard and lodging house for Indian Chettiars, part of Penang's active recycling industry, who dealt in second-hand material such as scrap metal and used containers. Other sub-tenants like a coffee shop and second-hand timber dealers also moved into the premises. During this entire period, the Syed Alatas Mansion was largely maintained as it was, with minimal alteration to the main buildings

After the war, the building was acquired by the Municipal Council but the Chettiar tenants stayed on despite the change of ownership. In 1993 the Council took possession of the building for the "Syed Alatas Mansion Heritage Development Project" undertaken by the Penang State Government and the Council with the support of the Federal Goverment and with French technical assistance.