After World War II, leading Indianapolis businessman Eli Lilly worked to create a state museum. Although his plans failed to materialize, community members continued these efforts and lobbied the Indiana legislature to create funds for a state museum. When the former Indianapolis City Hall became vacant in 1961, plans for a permanent museum seemed to finally be realized. However, the museum in the former city hall required both fundraising and renovations, and it was not until 1967 that the Indiana State Museum became a reality.
Plans to expand the museum faltered during the 1980s and 1990s, but the state legislature approved a funding bill that provided for the creation of the current facility in White River State Park in 1999. On May 22, 2002, the current facility held its grand opening in its state-of-the-art building.