The idea to build the Imperial Institute originated in the late 1870s with the idea to build a permanent Empire museum or exhibition in London. An Indian Museum (of art objects) was opened at South Kensington in 1880, and then following the success of the 1886 Colonial and Indian Exhibition the Prince of Wales enlisted the colonial representatives in a scheme to perpetuate the exhibition for the celebration of the Queen's approaching Jubilee.

The building was designed by T. E. Colcutt. The foundation stone was laid by the Queen in July 1887 and the official opening by the Queen took place on 10 May 1893 in a temporary hall as the Great Hall was not completed. Initially under Central Government control, the management of the Institute was transferred to the Colonial Office in 1907 and then to Department of Overseas Trade in 1925. The Institute provided information about trade and the buildings were used for a number of events. It housed a number of departments and exhibition galleries were used to promote trade and research. The building was also used to host overseas visitors. It was at the Imperial Institute that the National Indian Assocation held their 'At Home' event on 1 July 1909 at which Sir Curzon-Wyllie was assassinated by Madan Lal Dhingra.

In the 1950s, parts of the buildings were demolished for the expansion of Imperial College. The Institute was renamed the Commonwealth Institute in 1958 and moved to Holland Park in 1962.