This history is part of the reason Dan Flavin chose the building to house his work, and is referenced in some exhibits.

In 1974, the Dia Art Foundation was established by Heiner Friedrich, Schlumberger heiress Philippa de Menil, and Helen Winkler to help artists realize ambitious projects whose scale and scope is not feasible within the normal museum and gallery systems.

[3][4] While some repairs were made to the roof after purchasing, major renovations began in September 1982 with the architect Richard Gluckman designing the museum, under Flavin's direction.

Interior work included the addition of a fire sprinkler system and a large scale rewiring of the building to accommodate the power draws associated with Flavin's fluorescent light sculptures.

[3] Ultraviolet-filtered glass windows were installed with grey mylar shades to help control the lighting inside.

A small gallery on the second floor was created to hold memorabilia from the renovation process including the church doors and a neon cross.

Exterior doors, paneling, and shingles were restored and a blue light was installed under the lower cornice.

[8][3] Flavin dedicated and named the building after James Schaeufele, the site supervisor of the renovation project, as he often titled his work after people close to him.

[3][6] In its original configuration, the museum was created to house a permanent display of Flavin's work in the building's vestibule and second floor.

An artist's archive, a printmaking workshop area, and a rotating exhibition space were planned for the first floor and an upstairs apartment.

One exhibit per year is displayed in this rotating gallery, with a focus on artists living or working on Long Island.

The newly formed Bridgehampton Hook and Ladder Company of firefighters had its first meeting on May 15, 1895, with 15 members attending.

The two-story, plus attic, building held fire fighting equipment on the first floor and a meeting room, or "Fireman's Hall" on the second.

A motion was approved that stated if quarters were made for the fire department they would move in to the new building and sell the firehouse on Corwith Avenue, with the proceeds going towards the construction of the Community House.

The Bridgehampton Hook and Ladder Company was dissolved on May 28, 1923, and a new fire district was approved by the Town Board of Supervisors.

[6] Dia comments in a pamphlet that this space, and its neon cross, "alludes to Flavin’s transformation of light and fluorescent fixtures from spiritual associations or mundane service to contemporary “icons” depleted of religious or utilitarian significance.

[8] When the museum opened, the plans for the gallery were to present prints created on the premises, historical exhibits of late 19th to early 20th century etchings, drawings, and watercolors, as well as contemporary works by artists such as James Turrell and Donald Judd.

[14] For several years after his death the gallery was used to display his work including his drawings in 1997 and 1998,[27][28] and a selection of his early wall sculptures from 1999 to 2003.

Artists have used this prompt to make work that responds to the Flavin sculptures in the gallery upstairs, the history of the building, the land and the surrounding region, or the tangible and intangible qualities of the space.

[40] Artists presenting include Mary Heilmann (2017-2018),[41] Keith Sonnier (2018-2019),[42] Jacqueline Humphries (2019-2020),[43] and Jill Magid (2020-2021).

Maren Hassinger included a new galvanized steel rope sculpture installed in Dia Bridgehampton's back lawn for her 2021-2022 exhibit,[45] Leslie Hewitt installed a bronze silhouette on a boulder also in the backyard in 2022–2023,[46] and Tony Cokes purchased advertisements on nearby electronic billboards in 2023–2024.