It was established in 1960 by the Ministry of Public Works in order to replace the old museum (that was built in 1920) and collapsed because of the earthquake that took place in 1956.

The Museum of Prehistoric Thira includes finds from the excavations that took place in Akrotiri under the auspices of the Archaeological Society of Athens, the early excavations that took place in Potamos by members of the German Archaeological Institute of Athens and other excavations in various areas of the island that were carried out by the 21st Ephorate of Antiquities of Cyclades and Samos, as well as objects that were discovered at random or were delivered to the museum.

Ancient Thira, the Classical town of the island is located in Mesa Vouno, 369 meters above the surface of the sea. It was founded during the 9th century B.C. by Dorian colonizers, the leader of which was Thiras, and continued to be colonized up to the Early Byzantine Period.