Abstract Indian Mythology is one of the unique elements of Indian culture which enriches it further and makes it a unique one in the world. Through generations, different stories in Indian Mythology have been passed from generations to generation orally or in written scriptures. Gender dichotomy has been reflected as a dominant part of patriarchal society in these mythologies. As a result, this factor creates dangerous consequences which limit a person's full potential and wellbeing. Male or female because of these fixed identities imposed by the society, are forced to ignore their personality traits, temperament and unique characteristics and have to follow the fixed social and cultural notions of 'Masculinity' and 'Femininity’. This paper attempts to read Chitra Banerjee Divakaruni’s novel The Palace of Illusions as an attempt to reinterpret the gender and psychological issues which testifies unawareness of a double marginality, an inequality felt by Draupadi both in terms of gender and psyche. It redefines the roles and parameters of women as a challenge of womanhood, the embodied form of action, knowledge, devotion and power. The inner thoughts and resentments of Draupadi in various stages of her life are given voice by the novelist. Different from the epic, this Draupadi has been presented as one who questions the terms of the mythology which records her existence, by bringing out what it represses or excludes. Her life has been described in her own way which radically questions and consistently undermines the previous constructions of her life, being a victim of patriarchy which is perpetuated by the dominant discourses of the time, examining the power relation of Indian culture where gender is the basis of determining the role in society.