Created to receive the guests and host the most important ceremonies, the room was created between 1526 and 1528 and owes its name to the portraits of the superb life size noble horses painted on the lower part of the frescoed portion of the walls. Federico, as his father and his predecessors, bred and cared for their horses in the famous Gonzaga stables, considering them the best gift to a friend or important guest. Two of the six horses still have their names written below: "Morel Favorito" (literally "Favourite Dark-haired"), the grey horse on the South wall and "Dario", the fair horse on the North wall.
The horses stand out against landscapes in the background, dominating the great architecture painted on the walls, which features frescoed Corinthian pillars, niches with statues of divinities and busts of illustrious men and women above the windows. The upper part of the frescoed walls feature imitations of bronze bas-reliefs which narrate the Labours of Hercules.
The frieze which runs from the top of the walls and shows four eagles painted in the corners is populated by putti moving among pretty coloured spirals and masks.
The golden and blue wooden ceiling has in its coffering roses and the most reoccurring emblems in the palace: The Green Lizard and of Mount Olympus.