Modelled on the South Kensington Museum in London, now the Victoria & Albert Museum, the Imperial Royal Austrian Museum of Art and Industry was founded in 1863. The director of the first state museum in Austria was Rudolf von Eitelberger, the first professor of art history at the University of Vienna. The museum had collections of wood, glass, metal, porcelain and textile items, an art print collection and a library, which were intended as sample collections for artists, industrialists and the public and as an initial and advanced training establishment. The museum opened temporarily in the Ballhaus next to the Hofburg in 1864, before it moved in 1871, together with the Arts and Crafts School founded in 1867, to the neo-Renaissance building on Stubenring designed by Heinrich von Ferstel. After Eitelberger's death, his deputy Jacob von Falke was appointed director in 1885. He was followed in 1895 by Bruno Bucher, long-standing curator of the Museum of Metal, Ceramic and Glass, and in 1897 by Arthur von Scala, hitherto director of the Imperial Royal Austrian Museum of Commerce, most of whose contents were taken over by the Museum of Art and Industry in 1907. In 1909 a new building with further exhibition space was opened on the Wien River, the Arts and Crafts School separated from the museum, and the art historian Eduard Leisching appointed director.

During the First Republic, the Austrian Museum of Art and Industry, which was answerable to the Ministry of Trade, had to get by with the limited budgetary funds, particularly for new acquisitions. Apart from allocations from the former imperial assets, including Oriental carpets, the museum obtained duplicates in exchange from 1922 as well as new objects from art dealers and private collectors. In 1925 the former deputy director Hermann Trenkwald was appointed director, although he was replaced just two years by August Schestag, who had been at the Österreichisches Museum since 1899, following a damning report from the court of auditors. Richard Ernst, who had worked for the museum since 1911 as a specialist in silver and porcelain, became director in 1932. The museum was able to stage important exhibitions in the 1920s and 1930s, such as The Gothic Period in Austria exhibition in 1926 and the Werkbund Exhibition in 1930. The transfer of a major part of the Figdor Foundation from the Kunsthistorisches Museum (KHM) considerably enlarged the museum's holdings. In May and June 1937, the museum showed an exhibition marking Oskar Kokoschka's fiftieth birthday, while works by Kokoschka were being pilloried at the same time in Munich in the Nazi exhibition of "degenerate" art.

After the annexation of Austria in March 1938, Ernst was criticized above all for the Kokoschka exhibition. He nevertheless managed to stay in office and there were no other changes in the staffing either. In December 1938 one member of the library staff was dismissed because she was related to a Jewish "first-degree Mischling". Hans Ankwicz, head of the library and works on paper collection, was considered a "Mischling" and should have been dismissed. With Ernst's support, he was able to retain his post at first, but was dismissed in April 1939 by order of the Reichsstatthalter and replaced by Viktor Griessmaier. Ernst ensured that Ankwicz was able to continue working in the library but there too he was obliged to give it up after an anonymous denunciation in April 1941. The museum had been renamed Staatliches Kunstgewerbemuseum in Wien (State Arts and Crafts Museum in Vienna) on 20 May 1938 and put in charge of the Ministry of Internal and Cultural Affairs. The deputy director Ignaz Schlosser worked from 1938 to register items in the Zentraldepot für beschlagnahmte Sammlungen (Central Depot for Seized Collections) in the Neue Burg. When they were finally distributed, the Kunstgewerbemuseum received some major items. It also acquired objects, above all through art dealers. During the Nazi era, the museum obtained around 1,000 items from expropriated collections. From 1940 it continued the plans developed in the 1920s to further refine the collection profile. It exchanged almost 600 items with the Kunsthistorisches Museum's Sammlung für Plastik und Kunstgewerbe (sculpture and applied arts collection), now the Kunstkammer, and gave antique vases and terracotta items to the KHM's Collection of Greek and Roman Antiquities. In 1942, the museum acquired around 900 objects from the Furniture Collection. It had hoped to obtain its entire contents, but was unsuccessful, although the Reichsstatthalter announced its dissolution in November 1942. After the war, the Furniture Collection started up again. The museum's most valuable items had already been removed at the start of the war in 1939, but with the growing danger of air raids, the entire inventory was gradually removed in 1943 to the basement of buildings in Vienna and to palaces and monasteries close to the city. In autumn 1944 and winter 1944/1945 the museum was hit by bombs and the reading room and display rooms on Stubenring badly damaged.

Ernst remained director of the museum after the war and the reinstatement of the republic. Hans Ankwicz's forced retirement was retracted, but he left the museum in 1945 to become director of the library of the Academy of Fine Arts in Vienna. The main task of the Kunstgewerbemuseum was now to repair the damage and organize the return of the items that had been stored elsewhere. Most of them had survived the war unharmed. Occasional losses occurred at storage sites through war damage and looting. Schloss Immendorf in the north of the Weinviertel, where hundreds of objects from the Kunstgewerbemuseum were stored, was burned to the ground. One major task was to restitute works that had been expropriated during the Nazi regime. Almost 500 works were restored to their former owners after 1945. Around ninety items were barred from export and remained in the museum. In addition, the museum accepted around sixty items from Clarice Rothschild in return for export authorizations. In 1947 the museum was renamed Österreichisches Museum für angewandte Kunst (Austrian Museum of Applied Arts) and reopened on 31 March 1949 after the repairs had been completed. In 1951 Ignaz Schlosser became director, followed by Viktor Griessmaier in 1959, Wilhelm Mrazek in 1968, Gerhart Egger in 1979 and Herbert Fux in 1981. In 1984 Ludwig Neustifter became provisional director until the appointment of Peter Noever in 1986. Noever began to expand the collection of contemporary art and started the refurbishing of the entire building along with the erection of a two-storey underground depot. In 1996 the MAK, as it was now called, organized the "Mauerbach auction", in which artworks, coins, weapons, books, etc., deemed to be "abandoned" were auctioned for the benefit of victims of the National Socialists. Since 1998, the MAK collections have been investigated on behalf of the Commission for Provenance Research to identify items that might have been seized during the Nazi era. Since 1999, the Art Restitution Advisory Board has recommended the restitution of works to the legal successors of Gittel and Samuel Bauer, Michael Berolzheimer, Rudolf Bittmann, Ferdinand Bloch-Bauer, Emma Budge, Ernst Bunzl, Paul Cahn-Speyer, Willibald Duschnitz, Nathan Eidinger, Siegfried Fuchs, David Goldmann, Erny and Richard Gombrich, Stift Heiligenkreuz-Neukloster, Friederike and Siegfried Herzel, Emil Iwnicki, Anna Kutscher, Elise and Erich Müller, Wilhelm Müller-Hofmann, Stefan Poglayen-Neuwall, Ernst Pollack, Albert Pollak, Siegfried Radin, Anton Redlich, Heinrich Rothberger, Alphonse and Clarice Rothschild, Louis Rothschild, Emma Schiff-Suvero, Hermine Schütz, Alice Stein, Isak Wunderlich and Jacques Ziegler. Over 500 objects have already been restituted in this way.