After Elisabet Ney's death in 1907, her Austin studio, Formosa, was purchased in 1909 by Ella (Dancy) and Joseph B. Dibrell, who wished to preserve it as an art center in memory of Ney. They appointed a board of managers and opened the studio to the public for special exhibitions. On April 6, 1911, Mrs. Dibrell and other friends of Ney met in Ney's studio to found the Texas Fine Arts Association and the Elisabet Ney Museum. The museum was designated as the annual meeting place for the association and the gallery for its exhibitions; it thus functioned as one of the earliest centers for artistic development in Texas.
During the 1920s access to the museum was expanded with public visiting hours held once a week. In addition, the museum sponsored circulating exhibitions and programs, many of which focused on contemporary art. Ella Dibrell stipulated in her will that the studio be given to the Texas Fine Arts Association, but the organization was unable to maintain the property. In 1941 the city of Austin assumed ownership and has operated the museum as a component of the parks and recreation department. Management has rested with three people: Willie B. Rutland, 1927–67; May Diane Harris, 1967–77; and James D. Fisher, beginning in 1977. Willie R. Nunn served as museum attendant from 1946 to 1991. Curators have included Sarah D. Bolz, 1979–83; Lynn Lichtenfels, 1983–87; Martha George Withers, 1987–88; and Mary Collins Blackmon, 1989-.
In accordance with Elisabet Ney's wishes, her husband, Dr. Edmund Montgomery, gave the contents of the studio to the University of Texas, with the understanding that they were to remain in the building. These artworks and personal belongings comprise the core of the present collection. Besides furniture, tools, and personal effects, the museum has sculptures in bronze, marble, and plaster that include many of Ney's likenesses of contemporary political and literary figures: King Ludwig II, Otto von Bismarck, Giuseppe Garibaldi, Arthur Schopenhauer, and William Jennings Bryan. Also on display are her sculptures of Sam Houston, Stephen F. Austin, and Gen. Albert Sydney Johnston, as well as the allegorical figure of Lady Macbeth, which Ney regarded as her masterpiece. The collection now includes over forty of the 100 statues, busts, and medallions executed by Elisabet Ney.
In 1891 the Board of Lady Managers of the Chicago World's Fair Association commissioned the Austin and Houston statues, providing the impetus for the construction of Ney's Austin studio. Construction delays caused her to miss the exhibition, but the statues were later recommissioned by the state of Texas. Formosa, completed in 1893 and enlarged in 1902, was the earliest art studio built in Texas and is one of four extant nineteenth-century art studios in the United States. Ney personally designed and supervised the construction of the studio, which is built of native limestone and employs an eclectic mélange of Classical and Gothic architectural elements. The property on which the studio is located originally encompassed seven acres; today the museum's grounds extend for a square block on East 44th Street in the Hyde Park section of Austin. The grounds are bisected by Waller Creek and include the dam that once impounded the private "Lake Ney." The large ground-level workrooms are now utilized as exhibition galleries. Other rooms house a small research library and provide space for cultural and educational activities such as concerts and classes in sculpture, life-drawing, and children's art.
Until 1973 the Ney museum emphasized the exhibition of contemporary art. After its designation as a national historic site in that year, the museum began a program to reconstruct the studio as it was used by Ney from 1892 to 1907. From July 1980 to November 1982 the museum was closed for a structural restoration and the installation of a climate-control system; the cost of $500,000 was raised from public and private sources. Afterward, attendance averaged about 35,000 people per year, fifteen times the earlier levels.