The social, industrial and local history collection was planned in the 1960s when much of central Burnley - like other northern towns - was being demolished to make way for new developments and various exhibits were rescued from buildings due to be demolished. Many of the craftsmen's tools on display come from the last person carrying on that traditional trade in the district. The Brew House was converted to display the collection and was opened as the Museum of Local Crafts and Industries in 1971. The museum's name was changed to the Museum of Local History in 2002.
Now the collection, with an accession register distinct from that of the main museum collections, covers a wider range of social history items and part of the collection may sometimes be displayed in the Burnley Room as well as in the Brew House.