Chitra Banerjee Divakaruni’s The Palace of Illusions (2008) reinterprets the Mahabharata from Draupadi’s perspective, challenging the epic’s patriarchal framework and reclaiming female agency. This paper examines how Divakaruni employs feminist narratology and postcolonial discourse to subvert traditional gender roles in mythological literature. Drawing on feminist theory (Showalter, Chakravarti), mythological studies (Doniger, Hiltebeitel), and postcolonial critiques (Spivak, Alexander), the study argues that The Palace of Illusions transforms Draupadi from a silenced victim into a politically astute, emotionally complex protagonist. Through close textual analysis, this paper explores Divakaruni’s narrative techniques—first-person narration, interior monologue, and intertextuality—to establish how the novel reconfigures the Mahabharata as a feminist discourse. The findings reveal that mythological retellings serve as crucial sites for feminist resistance, offering new paradigms for gender representation in postcolonial literature.