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The name of the room comes from the French silk woven in Lyons which covered the walls and furniture. This room was much loved by Catherine the Great and she must have been especially grateful to Cameron for its splendid, yet warm and cozy appearance. This is the largest and most exquisite of the rooms created by Charles Cameron during the years 1781 - 1783. At the end of the 18th century it was called simply the "Formal Drawing Room." The formal use of the room was accentuated by the variety and wealth of its decor. The walls were covered in silk with a blue flower design on a white background. The paired marble hearths of Carrera marble with caryatids held up the corners of the cornice. On the west wall between two windows hung two vertical mirrors with rectangular gilded, carved frames covered in floral ornament and topped by protruding medallions. The mirrors were supported by carved, gilded consoles. The paintings on the doors were also executed in the manner of antique grotesques. The wall decorations were completed by a gilded frieze in the form of a row of vases with painted oval medallions created by an unknown 18th-century artist. The precious wood inlaid floor consisting mostly of rosewood with its exact geometrical pattern, floral ornamentation and delicate design engraved on the light-coloured wood was pieced together by the carpenter George Stalmeyer.

After the fire in 1820, the architect Vasily Stasov managed to retain the original layout of the room's decorative architectural design. The fire-damaged silk on the walls was replaced with new silk painted to match the previous pattern by the artist F. D. Brandukov. The ceiling remained white. In 1855, according to the plans by Andrei Shtakenschneider, the painting "Return of Scipion" by Mashkov was mounted in the centre of the ceiling. The corners were mounted with two round and two oval medallions of stucco bas-relief depicting female figures in flight. Following the fire of 1863, the damaged ceiling was once again re-plastered. Mashkov's painting had survived the fire. The silk on the walls was again replaced, this time with similar silk with a factory design produced by the Sapozhnikov factory. The frieze medallions were painted by Joseph Bernasconi.

During World War II, the silk wall coverings, painted ceiling and insets, as well as a major part of the painted frieze medallions were stolen; the doors, hearth and wall mirrors were destroyed. The architraves of the Carrera marble hearths were split and broken, and two of the caryatids had their heads and hands sawed off. Restoration work has returned the Formal Blue Drawing Room to its original appearance. The silk with printed flower pattern was reproduced based on old pieces by the Moscow "Krasnaya Roza" factory. The marble fireplaces and the almost completely preserved old inlaid floors were restored. Thanks to the architect G. G. Grimm, who discovered the plans for a ceiling mural for the Formal Blue Drawing Room among formerly unknown sketches by Charles Cameron kept in the State Hermitage, the ceiling has been restored to its original state. Sixteen surviving medallions of the original 80 were placed in the frieze on the wall opposite the windows. At present the furnishings include the same four armchairs from a set produced in 1783 from a drawing by Charles Cameron at the studio of Jean-Baptiste Charlemagne. They were recovered in Koenigsberg in 1946. The hearth grill and trivets, hearth-front decorations in the form of sphinxes, as well as fire irons made of gilded bronze based on a sketch by Charles Cameron at the Charlemagne shop at the same time as the rest of the room's furnishings, survive to this day. Particularly impressive are the 17-candle lamps of blue glass with crystal and unglazed ceramic figures produced at a Petersburg glass factory in the late 18th century, as well as candelabra dating to the early 19th century from the P. F. Tomir shops, and porcelain vases from a factory operating in Berlin during the late 18th and early 19th centuries.