The foundation of the Gundelsheim Museum followed the tradition of museum foundation in Transylvania during the 19th century. As an institution the museum is an important part of the Transylvanian Saxon culture (above all the Brukenthal Museum in Sibiu – the former national museum of the Transylvanian Saxons – but also the museum of the Asociația Carpatina Ardeleana (Siebenbürgischer Karpatenverein) in Sibiu. As early as 1841 the “Association for Transylvanian Culture” was founded with the aim to support “the research and studies of the home country in all of its aspects”. In order to preserve the heritage and culture in a more concrete way, socio-anthropological and cultural collections were established in the late 19th century. One of the most important ones here is the socio-anthropological and cultural collection of the Asociația Carpatina Ardeleana, which was started by Emil Sigerus and completed by Julius Bielz.
The Transylvanian Museum of Gundelsheim follows this tradition of Transylvanian museum institutions that are dealing with their own history and culture. Here in Gundelsheim, it was also the Transylvanian Saxon associations that first launched an exhibition in the 1960s and then established a museum based on the ethnic historical and cultural collections at Horneck Castle – home of and owned by the Honterus society – that were started by Lore Connerth-Seraphin. Initially, it had been intended to follow the traditional concept of demonstrating identity by collecting and preserving artefacts of the Transylvanian Saxon culture.
In 1968, the museum was opened up to the public. In 1973, the Board of Trustees – the Siebenbürgisches Museum Gundelsheim e.V. – was founded, which includes seven important associations of the Transylvanian Saxons in Germany. At a later stage, the city of Gundelsheim also became a member of the Board of Trustees. Since the start in 1973, the museum's exhibition space and collections have grown continuously. In 1991, the federal government in its capacity as the most important sponsor granted the museum the status of a state museum for Transylvania. As a consequence, the Transylvanian Museum has become the central official institution for the preservation, research and demonstration of artefacts of Transylvanian culture in Germany. While the collections had been extended rather randomly until then, the core collections are now complemented and extended systematically, through targeted collecting activities to give the museum a clearer profile. At the same time, Dr. Volker Wollmann – the then director of the museum – started a new collection of technology and traditional crafts and trades. For this, a storage building outside the museum's premises was built to properly store the comprehensive collection. When museum scientist Dr. Irmgard Sedler became Chairwoman of the Board of Trustees in 1999, another two important collection areas were added – one covering everyday urban and rural life and one covering church history.
In 1996/97 the permanent exhibition was completely redesigned and grouped by the themes of Transylvanian art and cultural history. Over the years, individual areas have been updated and media stations added. In 2006/07, two new halls, together comprising approximately 100 m², could be included for special exhibitions on the upper floor. Since 1991 the museum has cooperated with the Transylvanian National Museums in Romania on a scientific basis and this cooperation has been expanded since the turn of the millennium. The Transylvanian Saxon culture between myths, memory, history and presence in a multi-national environment characterises today's cultural and historical function of the Transylvanian Museum.