Funds for the construction of the Carnegie Library building were provided by a grant of $10,000 from steel tycoon Andrew Carnegie, who funded the establishment of some 3,000 libraries worldwide. The Museum building was designed by W.H. Weeks, an architect from Watsonville , California , and was built by the construction firm of Stephens and Maino of San Luis Obispo. The structure's sandstone was brought from Los Berros, near Arroyo Grande. The granite in the building was quarried from nearby Bishop's Peak and brought into the city on a spur of the narrow gauge Pacific Coast Railway. The Museum is the only building in San Luis Obispo County built with both of these local stones.
When a search for a permanent home for the Museum was undertaken in 1953, the newly formed San Luis Obispo County Historical Society received assistance from the San Luis Obispo City Council and the County Board of Supervisors. An agreement was struck regarding the old library building, and in 1956, the San Luis Obispo County Historical Museum was opened to the public.
Members of the Society had long dreamed of creating a county historical museum where local artifacts could be properly displayed and archived. This dream was realized on October 4, 1955 when the City of San Luis Obispo granted a renewable 50 year lease for the historic Carnegie Library in downtown San Luis Obispo to the Society for it to be used as a museum. The Society have spent the next fifty years building the largest and finest archive of historical artifacts of any museum located in San Luis Obispo County . With annual financial assistance from the County of San Luis Obispo , the Society's Museum had been in continuous operation since its founding, until the Carnegie Library Building was closed by the City of San Luis Obispo for seismic and general upgrades in July of 1999.
The museum was reopened in May, 2001 with new exhibits and a new public research room.
