During its physical tenure, the museum presented more than 200 exhibitions on American art and provided related programs and events for children, teachers, families, general adult audiences, and scholars.

The museum's physical location closed on October 31, 2004 after 24 years of operation, and it now serves as a lending collection and sponsors programing, as the Terra Foundation for American Art, which sometimes still uses the name Terra Museum.

Initially, the museum housed Terra’s collection of some 700 paintings, prints, drawings, sculptures, and photographs from the late eighteenth century to 1945.

In 1987, the Terra Museum of American Art moved from Evanston to an office building on Michigan Avenue in downtown Chicago.

Before the museum closed, Judith Terra, the founder's widow and his second wife, plus several board members, attempted to relocate the museum to Washington, D.C., but a 2004 legal settlement required the Foundation to stay in the state of Illinois for 50 years.