The museum is located in Hailey in the Gem State of Idaho. It was established in August, 1962 to "Discover, procure and maintain whatever may relate to the history of Blaine County".

It is housed in a building built in 1883 and was donated to the City of Hailey by the pioneering Friedman family, for the purpose of establishing a museum. The building was originally an adobe structure and has housed several occupants over the years.

The area encompassing Blaine County has experienced a rich and colorful history. The Shoshoni and Bannock tribes traveled through and hunted in the area. In 1824, Alexander Ross and his expedition were the first Caucasians to arrive in the Wood River Valley, followed by miners and ranchers. In the early 1800s, there developed a new prosperity and the towns of Bellevue, Hailey and Ketchum, and many other small communities emerged. Mining claims were filed, freight lines established, newspapers printed, more farms and ranches settled, casinos and brothels appeared, banks opened, churches and schools were built, and in 1883 the Oregon Short Line Railroad was extended to the Wood River Valley. Although mining speculation and supporting businesses eventually subsided and the population dwindled, the valley eventually diversified its economic base. Today it attracts people from all over the world who are fascinated by its unique history, world class scenery and activities.

The Blaine County Historical Museum serves as a place for participants to explore the Wood River Valley's past, research family histories, and view stored vignettes of mines, schools, agricultural contributions, transportation expansion, famous literary personalities, period fashions, western attire, and political memorabilia. Each display contributes to the historical perspective of life as early inhabitants and pioneers experienced it.