Although there had been a proposal by Johan August Udden (1912) for a major public museum in Austin, actual work toward what was to be the Texas Memorial Museum began in 1920 with the formation of a Committee on a Texas Museum at the 1920 Texas State Historical Association committee meeting in Austin. The committee consisted of chairman Harry Y. Benedict, Alex Dienst, Adele B. Looscan, William S. Red, Elizabeth H. West, and O. M. Ball; James E. Pearce and Charles W. Ramsdell were later added. Within a year Benedict resigned, and Pearce, chairman of the University of Texas anthropology department, was appointed to replace him. Although the committee apparently was discontinued after 1920, Pearce continued working for the establishment of a museum through lectures and publications. The Texas Museum Association was founded in 1926, with Pearce as president. Elias H. Sellards was secretary, and Eugene C. Barker, William James Battle, and Walter M. W. Splawn constituted the executive council. The association issued a number of influential articles and pamphlets, largely written by Pearce, and worked to build support for a museum among influential individuals and organizations. Pearce's particular concern was for the storage, preservation, and analysis of the artifacts from archeological excavations. With the help of Thomas J. Holbrook, bills were filed in the legislature in 1927, 1929, and 1931, but these were unsuccessful due to a lack of funds. Pearce then tried to raise private funds from several philanthropists, but the Great Depression rendered his efforts unsuccessful. An American Legion initiative eventually led to funding for the museum. Anthony G. Adair, a legion member and journalist, proposed in 1932 the minting of a silver fifty-cent piece to commemorate the Centennial of Texas Independence and to be sold by the American Legion, proceeds to be used for a public building as a contribution to the Centennial. Adair's legion superior, R. O. Whiteaker, suggested a museum "like Dr. Pearce has been talking about for many years." Congressional authorization was obtained for minting the coins, and the American Legion began negotiating with the regents of the University of Texas about the planning of the museum. The coins were sculpted by Pompeo Coppini and became available on November 20, 1934.
The Texas Memorial Museum was established as part of the Texas Centennial Celebration Bill of 1935, in which funds amounting to $225,000 were allocated for "gathering and preparing materials for exhibits of natural and civic history . . . and for furnishing and equipping the Texas Memorial Museum." The university regents were appointed the museum's board of directors. That same year the United States Congress appropriated $3 million for the Texas Centennial Exhibition, $300,000 of which was designated to help pay for the museum building. The museum was planned by the board of regents, and exhibit materials were collected and prepared by Pearce and other UT faculty. The regents decided that available funds allowed only construction of a small initial building. Additions in the form of wings were to be added later, and the central block was designed with this in mind. John Fanz Staub of Houston was the architect, and Paul P. Cret was consulting architect. The new museum was to house popular exhibits rather than research collections. This was a disappointment to Pearce, as was his appointment as acting director only, pending recruitment of a permanent director from out of state. President Franklin Roosevelt and Governor James Allred officiated at the groundbreaking on June 11, 1936. The cornerstone was laid in December 1937. The Texas Memorial Museum building was completed in August 1938, although the official opening was delayed until January 15, 1939, by which time Pearce had died. Sellards was appointed director, Carl Chelf curator of geology and anthropology, Eula Whitehouse curator of botany and zoology, and Adair curator of patriotic exhibits. There were attempts in the 1945, 1947, and 1949 legislatures to obtain funding for extensions to the present museum building, but these were unsuccessful. Money was voted by both houses in 1947, but an apparent lack of money in the treasury prevented any spending. Ownership of the Texas Memorial Museum was transferred in 1959 from the state to the University of Texas at Austin. The statue "Mustangs" in front of the museum was sculpted by Alexander Phimister Proctor and was dedicated on May 1, 1948. Ralph Ogden of Austin donated funds for the statue, and J. Frank Dobie recommended Proctor as the sculptor. Part of Proctor's work was done at the King Ranch, where he used wild mustangs as models.
In spite of the lack of space and the original plan for a popular museum, Sellards pursued a vigorous research and acquisition program in geology, paleontology, and anthropology. The museum was transformed into an active research institution. Sellards was succeeded in 1957 by the University of Texas anthropologist William W. Newcomb, Jr., who, while continuing the research tradition begun by Sellards, directed attention to new exhibits and to popular publications. Under William G. Reeder, who took over as director in 1978, research and publications focused particularly on evolutionary studies of living organisms. The museum is a major center for cave research and has developed a teaching program in museum studies. The Materials Conservation Laboratory, organized in 1979, develops handling and storage strategies for all divisions of the museum, evaluates and prepares material for exhibits and loans, and provides cleaning and stabilization treatment for objects from the collections. The largest collections are those in invertebrate and vertebrate paleontology; both are national research sources. In 1990 the museum's collections contained more than 4.5 million specimens. Four floors of exhibit halls housed permanent and temporary exhibits of natural history, vertebrate paleontology, geology, history, and anthropology. The growth of collections, programs, and personnel necessitated the acquisition of additional space elsewhere on campus and at the J. J. Pickle Research Campus. Financial support for the museum came primarily from state appropriations of university funds. A public support organization, the Friends of Texas Memorial Museum, was founded in 1984, and the Friends of Texas Memorial Museum Foundation was established in 1986.