In 1978, the group held a public meeting at which, after an offer was made to lease the former goods yard to the north of the former Alford railway station, the Grampian Transport Museum Association was formed.

A pilot museum was established in a local factory in 1981, and after the first annual Alford Cavalcade vintage vehicle rally held during July, a combination of local councils offered grants and subsidies to establish a permanent exhibition base.

Construction work on the current building was completed in September 1982, and the museum opened in April 1983.

An extension was completed in 1998, landscaping and a track added in the early 2000s, and a second building, the Collections Centre, to house larger exhibits in the 2010s.

[3] Major exhibits include the world's oldest Sentinel Steam Waggon from 1914, a giant Mack Snowplow and a working model of Robert Davidson's motor for electric traction.