The museum has its origins in the theatre-related collections of the Austrian National Library, dating back to the late 17th century.

In 1938, Stefan Zweig bequeathed his eminent collection of poets' and playwrights' autographs to the museum - before he had to flee the Nazis.

The purpose of the theatre-related collections was not limited to printed and archival items but to concentrate on the entire diversity of theatrical objects.

The premises became, however, very soon too small, and at length the Austrian Government acquired and renovated the Palais Lobkowitz, opening as Österreichisches Theatermuseum on 26 October 1991.

A special room is devoted to the Jugendstil artist Richard Teschner (1879–1948), showing his elaborate stick puppets and his marvelous Figurenspiegel (concave mirror with light effects).