Created in 1942 as an Archaeological Museum, in 1962 its name was changed to the National Museum of Spanish-Moorish Art, administered by the Ministry of Culture. In 1994 it acquired its present name, and came under the authority of The Council of the Alhambra.

The Museum possesses the best collection of Nasrid Art in the world, with specimens coming from artefacts found archaeological excavations and restored in the Alhambra, making a visit to it an ideal complement to a tour of the artistic-historical monumental complex.

In addition, the Museum houses a selected collection of pieces belonging to non-Nasrid Islamic Art that show the evolution of this art in the al-Andalus region and in the Arabic world.

The exhibition rooms of the museum have been on the ground floor of the Palace of Charles V since 1995. The refurbishment project was awarded the National Prize of Refurbishment and Preservation of Cultural Heritage awarded that year.