A row of buildings, seen from a rooftop perspective on the opposite side of the street, display signs on their facades while the public thoroughfare adjacent to these structures is hidden beneath the flat roof surfaces.
The signs, one of which bears the name after which the painting is titled, suggest that the buildings lining the street have a commercial purpose while a structure that resembles a grain silo behind the buildings gives the impression that this is an agricultural town.
The presence of mountains in the background, framed by a blue sky streaked with grey tinted clouds, could help irrigate the terrain with highland springs.
The buildings appear to have two or more floors and are painted shades of green, orange, white and yellow over a layer of plaster or mortar. Balconies with balustrades are positioned beneath six top floor windows that are thin, rectangular affairs with semicircular apexes.
This architectural style, typical of the frontier towns that appeared in Central America and the southwestern United States during the late nineteenth century, suggests that this town is located in either Mexico or portions of the United States near the Mexican-American border.
Arizona, California, New Mexico and Texas had previously been Spanish colonies and Mexican territories before joining the United States and retained those earlier influences.
Hopper, a painter of both rural and urban landscapes, was able to explore the themes of human habitation and natural terrain in El Palacio and combine them into one artwork.
The built-up area, a vision of a small town in the mountains with its rows of attached buildings and the peaks looming in the background, suggests a level of urban development while the green mass of foliage between the town and the mountains indicates that the terrain is viable for growing crops.
Construction in Mexico and Approaching a City, both produced by Hopper in the same year as El Palacio and sharing a similar focus on rural and urban landscapes, contain features that are reminiscent of those found in this painting.