Burnley Corporation took over Towneley in March 1902 and Towneley Park was opened to the public on June 28th. The hope for an exhibition in the summer of 1902 was abandoned after six weeks of initial planning. A start was made to the museum collections in April with the gift a box of birds from Herbert Wright, of the Royal Botanical Gardens, Ceylon. In July, Lady O’Hagan offered a complete collection of ancient Egyptian relics. However, structural work was needed together with a new heating system before the Hall was ready to be opened for the first exhibition in May 1903. (See heating plan, 1902 ) .
The first exhibition opened on May 20th 1903, making use of the South Wing and Great Hall. A daily record of visitors was recorded from the first day of opening. The exhibition was free and the success of the exhibition was measured by the number of visitors.
An exhibition catalogue was published and sold at 2d each. It was titled Art Gallery and Museum, Towneley Hall, Burnley . The exhibition displayed 384 paintings and engravings and 90 photographs on loan, carved ivories lent by George Eastwood and Egyptian antiquities given by Lady O'Hagan. Four cases of objects were borrowed from the V&A . The paintings were loaned from a wide variety of sources with over a third being on sale from commercial dealers. Around a dozen local authorities loaned oil paintings from their own collections.
In the first two months there were over 73,000 visitors and the town council agreed to keep Towneley open as a permanent Art Gallery and Museum. Rather than appointing a curator, the council formed a committee called the Art Gallery and Museum Sub-committee to " organise, manage and control exhibitions of pictures, works of art and curios at Towneley Hall ".
This first exhibition set a pattern of loan exhibitions of paintings, changing every six months. This continued for the next ten years, allowing the Sub-committee time to extend and develop the museum with first priority being the creation of a permanent collection of oil paintings.