The Austrian Theatre Museum at Palais Lobkowitz was created based on the Theatre Collection of the Austrian National Library in 1991. This collection was only actually established in 1922, but the initial systematic collection of various theatre-related items by the Court Library began as long ago as the baroque era: in the library Hall (the so-called “State Hall,” built in1726), for example, the so-called “Festliteratur” (Festivity Literature), consisting of richly illustrated accounts of pompous festivities at the courts of various rulers, was already kept as a group.

When research on theatre history expanded to become a new academic discipline-theatre studies-at the turn from the nineteenth to the twentieth century, Vienna had already taken a leading role in mounting theatre and music-related exhibitions. For this reason, 1921 saw the decision to establish a dedicated theatre collection as part of the National Library, and the librarian, theatre researcher and musicologist Joseph Gregor (1888-1960) was assigned the job of doing the preliminary work. Subsequently, 1922 saw Gregor mount the exhibition Komödie (Comedy) in the State Hall, in which items from the theatre-related holdings of the National Library were shown. This event gave the decisive impetus that made it possible to purchase the largest then-existing private collection of theatre-related materials, that of Burgtheater actor (and later director) Hugo Thimig (1854–1944).

The purchase contract was concluded on 7 June 1922, and a year later the Federal Ministry of Education confirmed the establishment of the collection and the title of “Theatre Collection". It was meant not to limit itself to literary and archival collection items, but rather to encompass theatre in all its many facets. Soon the quickly developing field of cinema was also done justice, with an “Archive for Film Studies” being established under the aegis of the Theatre Collection in 1929.

Inseparably connected to the Theatre Collection remained, for decades, the plan to establish a theatre museum. In 1931, the Collection succeeded in being granted its own rooms at the Burgtheater for a “Federal Theatre Museum". But in 1938, that museum was already a thing of the past. Only in 1975 was an “Austrian Theatre Museum" finally born. Its primary mission was to organise exhibitions using materials from the Austrian National Library. Its spatial situation on Hanuschgasse, right next to the Vienna State Opera, soon proved to be too confining. The Republic of Austria then purchased the nearby Palais Lobkowitz and had it renovated from the ground up.

With the opening of the main building of the Austrian Theatre Museum at Palais Lobkowitz on 26 October 1991, the previous theatre collection of the Austrian National Library was united with the holdings of the Theatre Museum: the result was one of the world’s largest and most important collections in the field of theatre, presented in a distinguished space. At the beginning of 2001, the Austrian Theatre Museum was made part of the Kunsthistorisches Museum.