The Österreichische Museum für Volkskunde (Austrian Museum for Folk Life and Folk Art), since 2013 also known for short as Volkskundemuseum, was created as a result of the popular interest in ethnological and folk life themes and the study of folk life and folk art established from the mid‑nineteenth century. In 1894, the ethnologists Michael Haberlandt (1860–1940) and Wilhelm Hein (1861–1903), both of whom worked in the Prehistory/Ethnography Department of the k. k. Naturhistorisches Hofmuseum in Vienna, set up the Verein für österreichische Volkskunde (Society for Austrian Folk Life), leading to the establishment of a museum with the same name in 1897. Michael Haberlandt was the first director, succeeded in 1924 by his son Arthur Haberlandt. The first years of the museum saw intensive collecting activity in the areas of Cisleithania and Bosnia and Herzegovina, occupied in 1878. In 1917 – during the First World War – the k. k. Kaiser-Karl-Museum für österreichische Volkskunde, as it was now called, moved to the Baroque Palais Schönborn in Laudongasse in the 8th district, which had been leased and adapted specially for the museum, where it still is today. With the political upheavals following the First World War, the museum, now called Museum für Volkskunde, focused on German-Austria and the German-speaking areas of the region known at the time as the "Sudeten and Carpathian lands". From 1920, the new museum also showed objects from the former crown lands of the Habsburg monarchy and from eastern and south-eastern Europe, now referred to as comparative European collections. After the economically turbulent 1920s, the museum and its "German folk culture" focus attracted increasing attention from the early 1930s. Folk life as an academic subject was now part of an political ideology aimed at re-educating people (particularly city dwellers) towards a corporate and "organic", hence premodern, society. The increased public interest in the Volkskundemuseum confirmed its position in the cultural landscape of Vienna and Austria, not least thanks to cooperation with German National and in many cases "völkisch" associations and organizations, such as the Deutscher Schulverein Südmark. During the period of Austrofascism, the Volkskundemuseum benefitted significantly from the politico‑cultural interest in German-Austrian folk culture and the promotion and idealization of products "made in Austria".
After the annexation of Austria to the German Reich in March 1938, the Museum für Volkskunde in Vienna once again drew attention to itself as a useful instrument of the Nazi ideology. The supporting association was not dissolved (and continued to exist throughout the Nazi period) and the museum's own publication, the Wiener Zeitschrift für Volkskunde, also continued. The museum obtained exceptional financial subsidies from the Reichsstatthalter (governor), particularly for new acquisitions. In this way it acquired folk life collections and objects formerly owned by Jews. Just a few weeks after the annexation, Arthur Haberlandt attempted to profile the museum as the "house of German folklore in the eastern Danube" and the "south-east". With this unofficial addition to its name, it reawakened politico-cultural awareness of collections and research on eastern and south-eastern Europe (from the period before 1918), which were of interest, under the ideological mantle of "German folklore studies", for the purpose of "establishing a 'völkisch' attitude in the Reich". There were also plans for the museum to move to the Messepalast exhibition centre, but they were never implemented. There was practically no exhibition activity, but the museum loaned objects for external exhibition projects in Berlin and elsewhere. With the outbreak of the Second World War, all exhibition plans for subsequent years were shelved, not least because the museum director was to be recruited for "wartime imperialist projects in the East". Part of the museum collection remained on display during the Nazi period, and part was stored in the basement to protect it from air raids.
After the war, those responsible for the museum were once again able to adapt immediately to the new political situation. The Museumverein functionaries, as they had been in 1944, now declared the Museum für Volkskunde to be a "Haberlandt family museum", attempting in this way to safeguard Arthur Haberlandt's position as director and president of the association. But Robert Bleichsteiner (1891–1954), appointed in August 1945 by the Ministry of Education as interim director, had other plans. He put the Viennese folk life expert Leopold Schmidt (1912–1981) in charge of the collections temporarily, effectively giving him responsibility for the research agenda of the Österreichisches Museum für Volkskunde, as it had been renamed. Schmidt, who was also deemed by the Allied administrative authorities to be unencumbered, was instrumental in shaping Viennese and Austrian folk life studies in the decades after the war. Under the restitution laws, eighteen objects were returned between 1947 and 1951 to their original owners – including the Bondy, Pollak and Ruhmann families. On the basis of an ÖMV Verein decision, further restitutions of expropriated objects were made in 1998 to the Jewish Museum Vienna and in 1999 to the legal successors of Alphonse Rothschild.
Since 2015, provenance researcher Claudia Spring has been investigating the previous owners of objects in the Volkskundemuseum inventoried after 1938. Although the Volkskundemuseum is a "Verein" (association) and not formally bound by the provisions of the Art Restitution Act, it cooperates closely with the Commission for Provenance Research – with the aim of ensuring a transparent and proactive identification and restitution of objects acquired illegally by the museum during and after the Nazi period. Since the start of provenance research, 377 objects have been restituted to the legal successors of Siegfried Fuchs, Konrad and Anna Mautner, and Robert Jonas. Restitution decisions in favour of the legal successors of Georg Popper and Wilhelm Hernfeld have also been pronounced. In 2017, the exhibition heimat:machen – Das Volkskundemuseum in Wien zwischen Alltag und Politik curated by Birgit Johler and Magdalena Puchberger dealt with the history of the museum and its protagonists in the first half of the twentieth century. The exhibition was the result of an extended FWF project and also covered past and present acquisition and restitution activities by the museum.