It is one of the oldest museums in the city, situated within the Golden Triangle of Art, at the south of the Puerta de Alcalá and the western side of the Buen Retiro Park.

Following the example of the Victoria and Albert Museum in London, it illustrates the evolution of industrial or "minor arts", including furniture, ceramics, glass, and textiles.

It was a place of learning for artisans, manufacturers and designers, similar to the Victoria and Albert Museum in London and the Musée des Arts Décoratifs in Paris.

[4] The museum was initially located in a building on Sacramento Street in El Madrid de los Austrias where it occupied six rooms.

In 1932, it moved to its current site on Montalbán Street, between the Paseo del Prado and Retiro Park, in a 19th-century mansion, built by the Duchess of Santoña in the 1880s.

It houses collections of great interest, both ethnographic and of artistic craftsmanship of ceramics, furniture, jewelry, textiles, and Oriental arts.

The museum focuses on Spanish decorative arts, but includes examples from other countries, mostly ceramics and luxury items imported from an early date.

The Spanish porcelain section includes pieces from the Porcelana de Alcora, Real Fábrica del Buen Retiro, and Royal Factory of La Moncloa.

The museum also has a metalware collection with a range of items from Saharan bracelets and Moroccan fibulas to Turkish inkpots (18th-19th century) and Korean cases.