In September, 1998, two local historians, Madolyn Frasier and Billy Becker, invited interested local citizens to meet with them to consider the possibility of building a museum for the Marble Falls area. That meeting resulted in the creation of The Falls on the Colorado Museum.
The museum structured itself as a 501(c)(3) non-profit corporation and museum members from the community chose a board of directors, laying the groundwork for the current organization. Funding came from donations from the local community and the City of Marble Falls, which also provided a nominal lease for a small building where the museum began a series of second Saturday programs centered around historical themes.
The second Saturday programs evolved into several permanent events, including Founders Day in July and Victorian Christmas Holiday Open House, as well as continued participation in other local events, such as Black History Month, Children’s Day Celebration, and Scoutarama.
The museum finally set up a display location in the fall of 2004 at 903 Second Street, then moved into larger quarters at its current site in winter of 2006. This represented a period of increasing growth of the collections and of expenses, all in keeping with the long term goal of the museum to develop into a permanent institution that can present the elemental artifacts and historical narrative of this region of Texas along the Colorado River. After some interior construction on the 1891 structure, the museum moved into the new location during December 2010.
The Falls on the Colorado Museum and Marble Falls Independent School District reached an agreement on a five-year lease on the Old Granite School Building on the campus of Marble Falls Elementary School at 2001 Broadway. The signed agreement began on November 15, 2010. The lease has been extended through 2030.