The compound, known as Bab al-Aziziya, was a main target for NATO airstrikes during the months leading to Gadhafi's ouster in late August.
In the past, many residents of Tripoli wouldn't even walk by it for fear they would be shot.
The commander of a revolutionary brigade says the area will be turned into a public park accessible to all Libyans.
The courtyard in front of Gadhafi's former house has already been turned into a weekly pet market, and residents roam the premises as if at a museum, with vendors selling revolutionary flags and other souvenirs.
Revolutionary forces have squeezed Gadhafi loyalists into one main district in his hometown of Sirte after weeks of fighting, but some said fears of friendly fire as well as a lack of coordination and communications were slowing their advance. Fighters from the eastern city of Benghazi and Misrata to the west were trying to reorganize themselves to solve that problem.
The Associated Press contributed to this report.