The museum was built thanks to the Business and Trading Chamber, which as early as in 1875 opened a small, but permanent exposition of the hand-made production objects in today’s Platýz at the avenue Národní třída; back then it was the family palace of the Porges of Portheim. Just like anywhere else in the world, the efforts were connected with the preservation of arts and hand-made objects with the starting era of mass machine production. The same reason was behind the opening of the Professional school for the goldsmith arts and related crafts by the Chamber in 1873. When Česká spořitelna offered the Business and Trading Chamber new exhibition grounds in the newly opened Rudolfinum, the museum could actually be established. This happened in 1885, when the museum activity began with the first real exhibition in Rudolfinum, with the first permanent exposition opened in 1886 and a library with a study made accessible a years later. A new building for the museum was built in the years 1897 – 98 according to the project of Josef Schulz in the French new-Renaissance style. The construction took place on a land plot purchased nearby Rudolfinum in place of two older houses and a part of the Jewish cemetery. The construction was carried out by the company Schlaffer and Hübschmann.
During the year 1900, both the museum and the library moved into the new building. The generosity of the benefactors and museum patrons allowed for grand decorations of the building and the interior. The window arches on the main front of the building are decorated with reliefs of crafts emblems by Antonín Popp and Bohuslav Schnirch. On the first floor, there are wicker-working, goldsmithery, locksmithery, lace manufacture, weaving, tinnery, armoury and bell-founding; on the second floor, there are cartouches with emblems of towns renowned for the individual arts and crafts.
Among the most well-known museum benefactors, there was Bohumil Bondy, president of the Business and Trading Chamber, Václav Němec, former head of the museum’s board, imperial council Josef Wohanka, and others. The most generous benefactor of all, successful collector and excellent expert, knight Vojtěch Lanna, donated to the museum a half of his own precious collections of glass, among other things, which has until today allowed for the presentation of a detailed development of glass relics from the ancient times until today. This glass collection is one of the greatest in the world.
The first director of the museum was an arts-historian dr. Karel Chytil, F. X. Jiřík and Karel Herain were directors in the years 1918 – 1945, and after 1948 it was dr. Emanuel Poche.
During occupation, the building was annexed by the German company Junkers, and the collections were deposited in different places in the Czech countryside, in the National Museum, and elsewhere.
In 1949, the museum was nationalized; in the years 1959 – 1969 it was connected with the National Gallery, and since 1970, it has once again been an independent institution founded by the Ministry of Culture. In the years 1970 – 85, a large reconstruction of the building took place, and the collections were closed. In 1985, a new exposition of arts and crafts from Renaissance until the 19th century was opened, to be replaced by a new permanent exposition named The stories of materials in the years 2000 – 2001.
The museum administers collections of glass, porcelain, and ceramics, commercial arts and prints, textiles, fashion and design, furniture, clocks, also a collection of precious and common metals, precious materials, jewellery, toys and numerous written and picture documentation.
At present, the museum administers four branches: Textile museum in Česká Skalice, Kamenice nad Lipou castle with a study depository of furniture, porcelain exposition in Klášterec nad Ohří, and Josef Sudek Gallery in Prague.
In 1995, the museum gained the so called Karlštejn treasure – a collection of 387 precious objects dated to the era of Charles IV, found during repairs at Karlštejn in the 1880s. The finders – two masons – kept their discovery a secret and sold the objects to dealers, which is how part of the treasure got as far as to Berlin, where it was purchased in an auction around 1911 by Mr. Borovský, then the director of the Museum of Decorative Arts. He then sold the treasure to factory owner Waldes for his museum of wardrobe switches in Vršovice. Jindřich Waldes was arrested by the Gestapo in 1939; other family members left the country, and the only thing they took with them from the treasure was a golden clip with pearls, which could have been the property of Charles IV. The rest of the treasure was confiscated. After the war, Waldes’ museum was abolished and the treasure was transferred to the Museum of Decorative Arts. In 1995, the collection was returned to the Waldes heirs, who dedicated it back to the museum, even with the golden clip. Among other exhibits of the Karlštejn treasure, there are two silver wrought cups, a gold-plated bowl with a portrait medallion, clothing decorations, stapling and buttons, a pearled brooch, smaragds and sapphires, gold-plated ends of belts, perfume container, etc.
There is a copy of a ceramic fountain by Petr Lada in the museum’s garden.