Castel Gandolfo, town, central Italy, in Lazio (Latium) Region, on Lake Albano, near Rome. The town is the site of a papal residence, Castel Gandolfo, a palace constructed in the 17th century, and of the Church of Saint Thomas of Villanova. The Vatican observatory also is here. Much of the town is part of the independent papal state of Vatican City. Population (1990 estimate) 7,000.