The Medieval Castle of Falkland was altered between 1453-1463 and was occupied as a royal residence by James II. James IV subsequently enlarged the North and East Ranges of the stronghold in the period 1500-1513, together with the building of a new chapel on the site of the present South Range. His son James V married a French lady Marie de Guise in 1536 and during the period 1536-1541 he transformed the whole building into a Renaissance palace. James V was firmly tied to Catholic France in alliance and marriage, during an era in England when King Henry VIII was breaking away from the Catholic Church and the Reformation was taking place. By 1542 James V had became exasperated by Henry's subversive and covert efforts to promote Protestantism in Scotland through John Knox and others, and he decided to have a battle with the English at Solway Moss but the Scots were unfortunately routed. He returned to the Fife Palace of Falkland whilst his Queen was awaiting childbirth, and within a week of the birth of his daughter Mary, he died at the age of thirty.

At one week old the child Mary became Queen of Scots, and the Queen mother had to hold the reins of government. She brought a contingent of French mercenaries to Scotland to prevent an invasion by Henry, and she later sought to prevent her child from getting into Henry's clutches by sending her to France for fourteen formative years. In 1560 the Queen mother died and parliament declared Scotland to be a reformed realm with John Knox drawing up a Confession of Faith. Mary Queen of Scots returned home in 1561, and married Lord Darnley, the heir of the Earl of Lennox. However they drifted apart after a year and when her son James VI was born in 1566, it was suggested that he was not the son of Darnley but that of her Italian secretary David Rizzio. Mary came to stay at Falkland Palace during her seven-year rule, but she was forced to abdicate in favour of her infant son (James) in 1567 and after fleeing to England she was imprisoned by Queen Elizabeth for nineteen years before being executed.

As a boy James VI was brought up at Stirling Castle under an excellent tutor and mentor George Buchanan. He had a fine education in history, theology, astronomy, geography and other disciplines and by the age of eight knew Latin, Greek and French. In 1578 he became ruler at the age of twelve after outwitting the fourth Regent into resignation. In 1582 when James was hunting near Perth he was kidnapped by the Earl of Gowrie, Chief of the Ruthvens, and held at Huntingtower for a year. However he managed to escape on a hunting expedition, with the help of Patrick, Master of Gray, the eldest son of the fifth Lord Gray. In 1589 James married Anne, the sister of King Christian of Denmark, and he frequently came from Holyrood House to his beloved Falkland Palace for hunting trips. On a visit to Falkland in 1600, James heard that the elder son of the Earl of Gowrie had returned to Scotland from Padua to claim his inheritance on the execution of his father. The king rode 20 miles from Falkland to Gowrie House at Perth with a party of courtiers, and on arrival he went to an upper room with his page John Ramsey, where Ramsey stabbed the two brothers John and Sandy Ruthvens to death. It was claimed that he was defending the king against a murderous act of treason.

Patrick Gray stayed close to King James as an advisor in the capacity of Master of the Wardrobe. He refused high office but he was a Machiavelli of Scottish politics, and had the objective of placing James on the throne of a united kingdom of Scotland and England. This was achieved in 1603 when James VI of Scotland succeeded Queen Elizabeth as King James I of England. James was intensely interested in theology, and during his rule from London a principal preoccupation was the imposition of the rule of bishops on the Scot's Kirk, which he believed would extend his own authority. The King James's version of the bible is still the standard translation and he claimed biblical authority for his doctrine of the divine right of kings and his royal right to appoint bishops to the Church of which he was the God-anointed head. James only returned to England once for a three-month period in 1617, during which he spent more time hunting at Falkland than on any other duties. He died in England in 1625 at the age of 59.

Charles I went much further than his father's attempt to impose bishops on Scotland, and he outraged the Scots by ordering an Anglican style of worship to be observed in Scottish churches. By 1638 the Scots had drawn up a National Covenant, or declaration of religious freedom, and this was the start of 50 years of the Wars of the Covenant against the Royal Decree that the king was head of the church and free to impose the form of worship. The Covenanters took up arms under the military leadership of the Earl of Montrose, Alexander Leslie a veteran of foreign wars and Archibald Campbell, the eighth Earl of Argyll. In the meanwhile Charles I was facing civil war in England, and he was concerned that the Scots would form a coalition with the English rebels. He therefore conceded what they wanted and appointed Argyll Marquis and Leslie Earl of Levan. However the Covenant triumph was short-lived as in 1649 Charles was executed by Cromwell and his Parliamentarians, and Cromwell marched north to bring Scotland into his Commonwealth. Cromwell died in 1658 and Charles II was restored to the Crown.

The Covenanter Hotel was originally a coaching inn and stables that was established during the reign of James VI and I, in the early 1600's and bore witness to the troubled times of the Covenanters who were active in Falkland. In 1666 the Parliament in Scotland passed the Recissory Act, which cancelled all acts passed in the years of the Covenant Parliaments. It declared the King to be head of the Church and restored the Book of Common Prayer. Harsh new measures were introduced under which subjects could only congregate at parish churches under the King's Curates, and attendance at them was obligatory. From this time the term Covenanter assumed a different meaning in so far as it referred to Presbyterian worshippers who decided to oppose the fines for non-attendance at parish churches. The Covenanters resisted by holding secret services officiated by their ousted ministers, and so commenced a period known as the Killing Times during which Covenanters were subjected not only to fines but atrocities and executions. This came to an end when Charles II died in 1685 and James VII and II, a Roman Catholic, ascended the throne.

John Welwood, a Presbyterian minister without a parish preached in a number of homes in Falkland. He wrote a letter to Catherine Ross on 25th September 1677 in which he said the following: "The curates in the Merse gave up a list of 3,500, all of which (a few excepted) were fined and forced to pay their fines. If I had time I would tell you of their rigour. But guess it by this. They took from some poor people 20 pence and 10 pence from others, blankets, coal sacks, from others, and yet the people came out abundantly to meetings". (Excerpt from Scottish Covenanter Stories - Tales from the Killing Times by Dane Love).