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The hotel (now a non-residential public house) is grade 2 listed (list entry number 1255910). Its historical significance is that the rightmost (east) section of the building incorporates elements of the original manor house of medieval Leeds (also known as 'Leeds Castle' after the earlier Norman structure on the site), with some roof timbers surviving from the 16th century.

The manor house was extensively rebuilt by Richard Wilson in 1761-5. The road outside, Bishopgate, is named after Christopher Wilson (a relative of Richard) who was the Bishop of Bristol from 1783 to 1792 and had inherited the freehold of the manor.

Most of the present building incorporates the 1765 rebuild, with terracotta tiling to the front added in 1922. In the 19th century there was a larger extension to the hotel to the north-west ('Scarbrough Buildings'), which was demolished c.1900 to make way for road widening. By this time the Scarbrough had lost its importance as a city centre hotel to the larger Queens Hotel nearby.

When first opened as a hotel in 1823 it was called the King's Arms. In the 1890s it was owned by Fred Wood, of the City Varieties music hall, who renamed it after the first proprietors of the hotel, Henry Scarbrough and his son Charles, and turned the upper storey into a concert hall. Recent research suggests their name at the time was spelled Scarborough, but the shortened form was adopted later. It is popularly known locally as the 'Scarbrough Taps' and is a favourite haunt of Leeds United supporters.

The 1922 frontage incorporates the names of the Burton brewer Ind Coope, which later became part of the local Tetley group. As of 2023 it is part of the Nicholsons pub chain.

Much of the above is courtesy of a talk by a local historian on the 200th anniversary of the hotel in 2023, as well as the official listing and other local sources.

The terms terracotta and faience can be used more or less interchangeably for the structural and decorative ceramic material used extensively on buildings from about 1880 to the 1930s. Faience is more generally applied to the type which has high glaze, often multicoloured, as featured for example on The Grand Arcade, and The Three Legs pub.

The material is similar to the denser bricks developed in the 19th century and has a generally impermeable surface compared with softer stones and common bricks. Compared with stone, where every stone had to be individually carved (even when done mechanically), terracotta decoration could be produced in numbers from a single mould.

The presence of large numbers of buildings using the material in Leeds is connected with the fact that one of the major British manufacturers was the Burmantofts pottery and brickworks in the eastern suburbs of the City. Around 1900 Burmantoft developed a very pale version, in imitation of white marble, which was given the trade name 'Marmo'. As well as being used for buildings in the more 'Rococo' style of the early 1900s (e.g. Scottish Union and National Insurance Company building on Park Row) it was much favoured in the Art Deco period for major cinema and shop frontages.