The museum is located in Staraya Russa on Monastery Square, previously named after Timur Frunze, in the buildings of the former Spaso-Preobrazhensky Monastery of the 12th century. Since 1966, it has been part of the Novgorod State United Museum-Reserve.

The first local history museum in Staraya Russa was opened on September 19, 1920, thanks to the initiative of artist V.S. Svarog, historian and local historian M.I. Polyansky, and teacher M.V. Vasilyeva, who became its first director. The museum occupied several rooms on the upper floor of the former zemstvo administration building, located at the intersection of Petrogradskaya Street (now Karl Liebknecht Street) and Lipoviy Boulevard (now Soviet Embankment). The exhibition included three departments: art, natural history, and archaeology. The core of the collection consisted of items from nationalized estates of local landowners, such as Prince Vasilchikov, Count Beningsen, and Count Zurow. The art gallery was opened on April 23, 1922, in the building of the People's House, now located on Krestetskaya Street.

In the 1930s, the local history museum and art gallery were housed in the Resurrection Cathedral. During World War II, German troops used the cathedral as a stable, and it suffered significant damage. On February 18, 1964, thanks to public initiative, the museum reopened in the building of St. Nicholas Church, with Lyudmila Vasilyevna Krasovskaya as its first director. In 1966, the museum became part of the Novgorod Historical and Architectural Museum-Reserve, and in 1974 it moved to the premises of the Spaso-Preobrazhensky Monastery.

Visitors can access permanent exhibitions: "Literature and Theater in the History of Culture of Staraya Russa," opened in January 1978 in the former Church of the Nativity, "Finds of Archaeologists in the City of Staraya Russa," operating since June 1976 and presenting materials from excavations led by A.F. Medvedev, V.G. Mironova, and E.V. Toropova, as well as "History of the Spaso-Preobrazhensky Monastery" and the art gallery.