"Palaces of Montezuma" was recorded during the sessions for Grinderman 2. The sessions began in August 2008 at RAK Studios in London, United Kingdom and continued in State of the Ark and Assault & Battery 2 until August 2009.
The song's title refers to the Moctezuma II, the Aztec leader and ruler of Tenochtitlan from 1502 to 1520.