With initial acquisitions from the 1876 Philadelphia Centennial Exhibition, the Museum began to establish what has become one of the nation's oldest and largest collections of costume and textiles.

An official department was established in 1893. Then known as the Department of Textiles, Lace and Embroidery, it was one of Museum's first three departments--the other two being American Pottery and Numismatics. Mrs. John Harrison, president of the Associate Committee of Women, served as honorary curator from 1894-1919. Originally, the department was to serve as a design and technical resource for students at the textile school that was founded ten years earlier and was operated by the Museum.

Its first exhibition illustrated the history of lace manufacture, displaying the collection of Countess de Brazza--a collection that became the nucleus of the department’s lace holdings. The acquisition of American costume and textiles began in the first years of the 20th century with a gift from Mrs. William D. Frishmuth that highlighted "home life, customs, and manufactures of colonial times." It was later expanded by major gifts of 18- and 19-century American material, ranging from weaving pattern books and Pennsylvania German quilts to the clothing of fashionable Philadelphians. Mrs. Frishmuth's gift of European regional headwear also formed the basis for additional folk collections.

Textiles developed in depth and breadth under the direction of Nancy Andrews Reath from 1926 to 1936. Reath's seminal work, involving the classification and analysis of historic fabrics by their structure, established a new methodology that today is regarded as a landmark in textile studies. During her tenure and beyond, significant gifts and purchases of Chinese, Japanese, Indian, Persian, and Southeast Asian costume and textiles were made, while acquisitions of 18th- and 19th-century French printed textiles placed the department's holdings at the forefront of North American collections of American and European printed textiles.

The first costume galleries were opened in 1947 under the sponsorship of the Philadelphia Fashion Group. Marianna Merritt Hornor served as the first curator of costume until 1955, followed by Elsie Siratz McGarvey. It was in 1956 that the Museum received its best-known (and most popular) item of clothing, the wedding dress worn by Princess Grace of Monaco.

The Museum’s collection of samplers was enhanced with a 1969 gift from Pet Incorporated, featuring the famous Whitman Sampler Collection of over five hundred American and European samplers assembled by the Philadelphia chocolate manufacturer. The same year, Elsa Schiaparelli's gift of seventy-one costumes and accessories brought some of the most iconic examples of 20th-century fashion to the Museum.

The holdings continued to grow in the decades that followed, with Delights of Fine Fashion marking the inaugural exhibition in the Museum’s new Costume and Textiles gallery in the fall of 1979. Though it wasn't until 1997 that the Museum mounted its most comprehensive costume exhibition, with Best Dressed: 250 Years of Style, large-scale costume exhibitions have proven to be extremely popular with visitors in recent years.

The opening of the Museum's Perelman Building in 2007 marked another new era for the department, with two new gallery spaces, state-of-the-art work and study rooms, a dedicated conservation lab, and expanded, climate-controlled storage for the fragile and light-sensitive collection--a collection which now numbers over 30,000 objects.