The Decorative Arts Collection was founded in 1966 by the Archaeological Service of the Dodecanese. The majority of the objects that formed the nucleus of the Collection were assembled at the time of the Italian occupation of the islands by the ethnographer Marica Montessanto. They were originally put on display by the Italians in the Ethnographic Museum of the Dodecanese, which was then housed in the Villaragut Ottoman mansion in Ippoton Street.