The museum was established in 1967 and was first located in the Juma Mosque in the Old City. The mosque was built in the 15th century and then renovated in the 19th century. Its first exhibition was held in 1972. In 1992, after the collapse of USSR, the museum was moved to the second floor of what is now the Baku Museum Center, a building that had originally been the Lenin museum. The collection was named in honour of the carpet designer Latif Karimov.