The gallery was created to provide a permanent building as the core space for the second Yorkshire Fine Art and Industrial Exhibition of 1879, the first in 1866 having occupied a temporary chalet in the grounds of Bootham Asylum.

The 1866 exhibition, which ran from 24 July to 31 October 1866 was attended by over 400,000 people and yielded a net profit for the organising committee of £1,866.

A meeting of this committee in April 1867 committed to "applying this surplus in providing some permanent building to be devoted to the encouragement of Art and Industry".

[5][8] The period up to the commencement of the Second World War was one of modest growth, the major event being purchase of the Dr William Arthur Evelyn collection of prints, drawings and watercolours of York in 1931.

The building was requisitioned for military purposes at the outbreak of the Second World War and closed, suffering bomb damage during the Baedeker Blitz on 29 April 1942.

It was recovered and returned to the gallery in 2023 after an auction house in Dorchester linked it to a listing on the Art Loss Register.

[11] At closing time, four members of staff were threatened by two men bearing pistols and wearing ski masks.

[12] The main perpetrator, Craig Townsend, was arrested by armed police when he, and another man, arrived at an arranged meeting with an art dealer to sell the stolen paintings.

The posters depicted a reworked version of Miller's 2009 work 'York – So Good They Named It Once'; part of his 'Pelican Bad Weather' series of humorous book covers.

The works acquired are by four British artists: Prunella Clough, Margaret Mellis, Marion Grace Hocken, and Daphne Fedarb.

It had changed from a charged-entry to a free-entry model after the first COVID-19 lockdown in England, but a 2023 review of this showed that it was revealed that the move was costing £200,000 per year in lost income.

[26] In March 2021 it was announced that the Art Gallery would reopen on 28 May to coincide with the launch of a new exhibition 'Grayson Perry: The Pre-Therapy Years'.

Amongst York born artists the gallery has the largest collection of works by William Etty and good paintings by Albert Moore.

Henry Keyworth Raine, the great nephew of William Powell Frith, gifted various works, including a portrait of George Kirby (1845–1937), the First Curator of York Art gallery.