It was incorporated in Washington, D.C., as a non-profit organization in March 1926,[2] listing as its objectives the "collection, acquisition, and preservation … of manuscripts, relics, books, pictures, and all other things and information pertaining to the history and traditions of the United States Navy and Merchant Marine" for educational and literary purposes and "the diffusion of knowledge respecting such history and traditions, either by publication or otherwise.

"[1][3] The foundation held its inaugural meeting on March 23, 1926, during which it elected retired U.S. Navy Rear Admiral Austin M. Knight as its first president.

Its membership soon grew to include such notable figures as Vice Admiral William S. Sims, who had served as Commander-in-Chief of U.S.

Despite the foundation's close association with President Franklin D. Roosevelt, its dream of a museum on the National Mall never came to fruition thanks to the economic hardships of the Great Depression.

Aided by the foundation's vice president, retired Fleet Admiral Chester Nimitz, King led a vigorous fund-raising effort to raise capital for a naval museum in Washington, D.C.

Although health issues forced King to step down from the presidency in 1949, his successor, retired Fleet Admiral William D. Leahy, completed the fund raising effort.

[1][4] Its first exhibit was entitled “Commodore Thomas Truxtun and Stephen Decatur and the Navy of their Times,” and shortly after that naval historian Samuel Eliot Morison gave a talk at the museum on “The Battle of Midway.” Morison's talk was so successful that under Leahy the foundation sponsored a lecture series in the Washington, D.C., area on naval history topics for foundation members and their guests.

Leahy finalized arrangements with the Library of Congress to hold and provide custodial care for the foundation's manuscripts.

[1] In 1961, toward the end of Knox's presidency, the foundation's members approved and adopted new by-laws that provided for a board of directors and a chairman.

The foundation also began to publish a series of monographs devoted to historical subjects too large for the newsletter.

Early titles in the series included I Was a Yeoman F in 1967, The Incredible Alaska Overland Rescue in 1968, and The Enlistment, Training, and Organization of Crews for Our Navy Ships in 1972.

[1] DeLany died in 1980, and a former Chief of Naval Operations (CNO), retired Admiral James L. Holloway III, took over the presidency.

In 1983, the foundation's Pilot House Gift Shop opened, and a portion of its profits went toward support for the museum.

Under Burke and Holloway, the foundation organized a fund-raising committee to acquire museum-quality furnishings for Tingey House.

[1] In 1985, retired Admiral Jerauld Wright, the foundation's director, began a campaign to restore the birthplace of John Paul Jones at Arbigland in Kirkbean, Scotland, creating a “Friends of John Paul Jones” fund-raising group.

The group raised $50,000 for the restoration project and over the ensuing decades urged support for the birthplace as a U.S. naval heritage site.

[1] During the 1990s, the foundation's staff expanded when, using a US$20,000 grant provided by Ambassador William H. G. FitzGerald, it hired graduate student David Winkler to conduct oral history work.

Under this leadership group, the foundation used the services of volunteers to expand its oral history program and initiated a "Naval Heritage Speakers" program in which experts on naval history topics addressed audiences around the United States.

The first, The Navy, a narrative treatment of American naval history first published in 2000 and nicknamed the "White Book," by 2022 had undergone several reprints sold over 400,000 copies, and remained in high demand.

Retired Admiral Bruce DeMars succeeded Holloway as president and then chairman of the foundation, serving in these capacities for a combined 28 years.

Declining revenue forced Fallon to approach the United States Naval Institute early in 2022 to discuss a merger.

Keeping the website active allowed readers to maintain access to past issues of Pull Together and "Thursday Tidings", as well as to other content such as the Naval History Book Reviews.

After the foundation's dissolution at the end of 2022, the United States Naval Institute assumed the responsibility for awarding the Knox Medal.