- "I imagine it was a sad joke at the end. An entire arena for a few sickly creatures smaller than dogs. But in the beginning, when it was home to Balerion the Dread, it must have been the most dangerous place in the world."
- ―Tyrion Lannister
The Dragonpit is a huge structure in King's Landing that House Targaryen once used as a giant stable for their dragons. It was built following Maegor Targaryen's destruction of the Sept of Remembrance and destroyed during the civil war known as the Dance of the Dragons during a smallfolk uprising lead by the Shepherd. The few remaining dragons died out soon after the war, so it was never rebuilt and left in ruins ever since.
During the Dance of the Dragons, a city-wide riot broke out, and the mob focused their anger on the dragons which were the source and symbol of power for the Targaryen kings. The mob - a vast wave numbering in the thousands - converged on the Dragonpit atop Rhaenys's Hill, the giant domed stable where the dragons were kept when not in use.
Many thousands of rioters died that night, but through their sheer numbers they managed to kill five dragons (largely because they were still chained up, and three were juveniles). The Dragonpit itself was left in ruins when the dragon, Dreamfyre, crashed into the ceiling in an attempt to escape, bringing down the entire structure, killing itself and several hundreds of rioters.
In the books
In the A Song of Ice and Fire novels, the Dragonpit is a huge, cavernous building that sits atop the Hill of Rhaenys in King's Landing. It is located on the opposite side of the city from Visenya's Hill, atop which stands the Great Sept of Baelor. Flea Bottom is located on the south side of the hill (at the bottom), and the Street of Silk (the red light district where Chataya's brothel is located) is on the northern side.
During the early years of the city, a great Sept was built on Rhaenys's Hill known as the Sept of Remembrance which used to be the main Sept in King's Landing. During the Faith Militant uprising, about forty years after the Targaryen Conquest, Maegor the Cruel mounted on Balerion the Black Dread incinerated the Great Sept with dragonflame. Afterwards, Maegor decreed that a large domed structure would be built on the hill as a "stable for dragons". Maegor had just finished construction on the Red Keep, after which he had all of the builders killed to preserve the secrets of the hidden passages within it. Understandably, few stonemasons and laborers volunteered to build the Dragonpit: instead, prisoners from the city's dungeons were press-ganged into construction labor. They were supervised by architects from Myr and Volantis.
Despite it's simplistic name - "dragon pit" - it was actually a gigantic colosseum-like mega-structure. Thirty knights could ride abreast into its entrance. Forty large undervaults were carved deep under the hill, intended for one dragon to nest in each, though there were never that many Targaryen dragons at once. There were only 20 during the Dance, and many fewer during Maegor's time. Apparently he had the foresight to anticipate the number of dragons to grow in the future. Inside of the dome, the walls were lined with stone benches which could comfortably seat 80,000 people so it was used for public spectacles such as the funeral ceremony for King Jaehaerys I Targaryen. When living dragons still nested beneath the dome, light would shine through the windows at night. Subsequent generations of dragons grew smaller. Some said it was because they were contained in the Dragonpit, though others scoff that by the same logic men who live in small houses should grow smaller. Many dragons continued to nest in the sides of the Dragonmont volcano on Dragonstone island. Dragons could be stabled in the Dragonpit, but nests for their eggs needed the heat of the volcano.
During the Targaryen civil war known as the Dance of the Dragons, King Aegon II's coronation took place in the Dragonpit. Later, after King's Landing was captured by Queen Rhaenyra, the Dragonpit was destroyed during the Storming of the Dragonpit, when tens of thousands of crazed and starving smallfolk led by the deranged prophet known as the Shepherd stormed the dragonpit to kill the dragons within. Five Targaryen dragons (Shrykos, Morghul, Tyraxes, Dreamfyre, and Syrax) and thousands of smallfolk were killed. The Dragonpit was reduced to flaming ruins. So few dragons survived the Dance that the Dragonpit was never rebuilt. The last dragon, a stunted creature, died only 22 years after the Dance, so there was simply no need for it.
During the Great Spring Sickness so many people died so quickly that there was no time to bury the bodies. Instead they were piled up in the Dragonpit and when the corpses were 10 feet deep, the Hand of the King, Lord Brynden Rivers, ordered the pyromancers to incinerate them. The fires burned night and day, the dark green glow of wildfire visible through the windows at night through all of King's Landing.
By the time the War of the Five Kings breaks out, the Dragonpit is still an abandoned ruin, though it is now frequented by whores (apparently spillover from the nearby Street of Silk - the cheaper kind of street-walker whores who can't get work in a dedicated brothel building). In the second novel, one of these whores and her patron fall through the floor and stumble onto one of the hidden Wildfire stashes that the Mad King had hidden throughout the city during Robert's Rebellion - part of the Wildfire plot to have the pyromancers destroy the entire city rather than let it fall to the rebels. This recovered stockpile enabled Tyrion to use it against Stannis's fleet at the Battle of the Blackwater since the pyromancers could never have made the massive quantities of wildfire needed on such short notice. The TV show omitted this extra detail and just said that the alchemists worked day and night to produce that much wildfire.
When the Dragonpit is introduced the TV series during the Season 7 finale, it isn't nearly as large as the Dragonpit in the novels. A simple visual analysis of the TV version seems to indicate that none of the entrances are actually large enough for a dragon to enter through. Apparently it was filmed on-location in a Roman colosseum in Spain - even though a Roman colosseum wasn't built on a scale to house dragons.