The location was chosen as a milder winter retreat for the health of Anna Huntington, who suffered from tuberculosis from the mid-twenties to the mid-thirties.
The masonry structure was built from 1931 to 1933 without drawn plans. Archer Huntington had already designed the residence for them with his detailed imagination "in his head". Local labor was used at Archer Huntington's insistence to provide work for a community hard hit by the Depression.
The 2,500 acre tract was leased to the state in 1960 for use as a state park. Mrs. Huntington died in 1973. Atalaya was listed on the National Register of Historic Places in 1984. The Friends of Huntington Beach State Park offer guided tours of Atalaya and operate the Atalaya Visitor Center with exhibits about the house and the Huntingtons.