The historic hotel in North Wales is to undergo a £1.5m redevelopment and create 40 new jobs in time for the summer season.
The upgrade, being carried out by Mold-based MPH Construction, is intended to help the 60-room hotel achieve 4-star status as well as providing new facilities including a spa and wellness centre.
The investment is being made via bank funding from HSBC and a development grant from the Welsh Assembly and comes on the back of a surge in business last year.
Planning consent was secured just before the credit crunch squeezed the hotel and hospitality industries in 2008.
But last year a record turnover was achieved says owner Anthony Saint Claire: ""Although initially caught by the severity of the world economic downturn, the dedication and effort of the management team and staff has not only enabled the hotel to survive, but also to improve standards and position the hotel to justify the support of HSBC and the Welsh Government to enable it to move forward"
"It is also important to thank both HSBC and the Welsh Government for their belief in Ruthin Castle and its team and for the support they are providing, without which these new upgrades and development would not be possible. Not least of all we owe a huge 'thank you' to all those guests who have supported and continue to support the hotel."
The former royal fortress and mansion became a 3-star hotel in the 1960s and was partially upgraded to 4-star standard in 2005-6 after being purchased by its current owners at the end of 2004. After years of consistent growth the hotel was suddenly hit by the commercial downturn at the end of 2008, but the owners and staff fought back hard and in 2011 achieved record turnover and as a result have been able to maintain employment levels.