The museum was founded on October 5, 1919, by a commission headed by the famous artist and academic of painting Fyodor Alexandrovich Modorov, a native of Mstera, at the Mstera State Art and Craft Workshops.

In April 1923, the "Museum of Church Antiquities" was established, located in the building of the Epiphany Cathedral of the former Epiphany Male Monastery.

In August 1945, the museum was transformed into the State Mstera Museum of Folk Arts and Local History, which was closed in 1954.

From 1975 to 1989, the museum was a branch of the State United Vladimir-Suzdal Historical, Artistic, and Architectural Museum-Reserve.