Palace Beautiful symbolizes the church and the spirit of Christian fellowship that it generates. It is a place of peace and repose, where Christian can spend time in the company of Prudence, Piety, and Charity, free from the cares of the outside world.

Such a place was incredibly important to Bunyan, as with all Nonconformists, at a time of widespread religious persecution. The two chained lions guarding the path leading up to Palace Beautiful represent the civil and ecclesiastical authorities of Bunyan's day who carried out such persecution. Like the government and the state church of late 17th-century England, they are a test of faith that must be overcome if the true Christian pilgrim is to keep to the correct path in life.

Faithful never got a chance to sample the delights of Palace Beautiful; he was martyred back in a town called Vanity. What Bunyan appears to be saying here is that in order to go to heaven, it isn't necessary to be attached to a specific church community, as represented by Palace Beautiful. The common thief who died on the cross with Jesus certainly wasn't part of any congregation, yet Christ guaranteed his entry into heaven nonetheless. Of course, Bunyan thinks it better for Christians to join a congregation if they can, to become part of a visible church. It's just that it isn't essential for getting to heaven.