It was established in 1901 by W. G. Collingwood, an artist and antiquarian who had worked as secretary to art critic John Ruskin. The museum is both a memorial to Ruskin and a local museum covering the history and heritage of Coniston Water and the Lake District.
The museum is a registered charity in England & Wales, constituted as The Coniston Institute and Ruskin Museum.
Its collections include material on the copper and slate mines of the region, geology, lace making, farming, and writer Arthur Ransome.
A larger collection is devoted to the life and work of John Ruskin.
A specialist collection covers the achievements of Donald Campbell, who died while attempting a new water speed record on Coniston Water. In December 2006, his daughter Gina Campbell donated the salvaged remains of Bluebird K7 to the Ruskin Museum on behalf of the whole Campbell family. The original boat as recovered is now the sole property of the museum, and the boat is being rebuilt for the museum under the control of The Bluebird Project led by Bill Smith. 
In the 1980s, the museum was at risk, and a project was launched to secure its long-term future. An £850,000 development scheme (funded by the Heritage Lottery Fund, European Regional Development Fund, Foundation for Sport and the Arts, the Rural Development Commission and others) was started, designed by Janvs Ltd, and the restored museum with a new extension re-opened in May 1999.