The museum is run by volunteers and has a fleet of trams which operate on part of the original horse tramway around Lake Wendouree and the Botanical Gardens.

It has a large research collection, archive of information and more than 3,500 items about the Ballarat tramways.

[2] The first group to work on saving part of the historic tramway was the Lake Wendouree Tramway Museum Committee which in May 1971 began negotiating with the State Electricity Commission of Victoria (SEC) who was the operator of the trams.

[4]: 14  In 1995 they changed the name to the Ballarat Tram Museum Inc.[3]: 51 The original plan was to keep all the tramway that ran around the shores of Lake Wendouree.

However, after discussions with the SEC and the City of Ballarat, only the section of track that was in the Botanical Gardens was kept.

Six Ballarat trams which had been stored in the old depot had to be towed around Lake Wendouree to the new site.

The Ballarat Tramway Museum has restored this tram to working condition.

After extensive rebuilding, and the discovery that it was the original Number One tram from 1887, it is now used for special occasions.