Caphouse Colliery was sunk in the 1770s or 1780s, and the Hope Pit followed in the 1820s. In 1827 Sir John Lister Kaye of Denby Grange took over the leases and rolled the pits into his Denby Grange Colliery. The brick chimney and the boiler house, both Grade II listed today, were built around 1876 for Emma Lister Kaye, along with the steam winding engine house and boiler yard now classed Grade II*. The Lancashire boilers in the boiler house powered the winding engine that lifted men and coal. The timber headgear at Caphouse and the wood-framed screens building at Hope Pit date from between 1905 and 1911. The pithead baths, where men washed off the day's coal dust before going home, were added in 1937. Lockwood and Elliott of nearby Shuttle Eye Colliery had taken over by 1942. Nationalisation in 1947 brought it into the National Coal Board. A drift mine opened in 1974. And in 1985, in the dying months of the great miners' strike, Caphouse went dark.

The museum opened in 1988 as the Yorkshire Mining Museum, on a semi-rural site where the pit headgear still stands above its shaft. It was granted national status in 1995. What makes the place different from every other industrial museum in Britain is the underground tour. Visitors descend in the original cage to the actual workings, where guides who almost always used to mine for a living walk them through galleries that progress through two hundred years of coalface history. You see the early pick-and-shovel work. You see the pit ponies. You see the Davy lamp and the methane and the long wooden props that held the roof up. The galleries record how mining changed as the industry changed. The men leading the tours remember the strike, the closures, the way communities held themselves together when the pits went. They will tell you, if you ask, what it felt like.

On the surface there are over a dozen galleries documenting the social and industrial history of coal. The library and archive hold a first edition of De re Metallica, the 1556 Latin masterwork by Georgius Agricola that founded the scientific study of mining, along with issues of Coal News and records of collieries throughout England. The pit head baths, steam winding house, boiler house, and coal screening plant all survive on site. A paddy train runs between the main Caphouse hub and the Hope Pit area, where reed beds and bird hides operate as a natural water treatment facility in partnership with the Coal Authority. A nature trail threads through the wooded valley. The Miners Memorial Garden opened in 2015. A mining-themed adventure playground was built in 2017. From 2018 onwards, a National Lottery Heritage Fund grant rebuilt the visitor welcome hub. The museum is an Anchor Point of ERIH, the European Route of Industrial Heritage.

Since the early 1990s the museum has kept pit ponies. They live in the old stables block and now in a new interactive Pony Discovery Centre opened in 2021. Pit ponies were once the silent labour force of British coal mining, hauling tubs of coal along underground rails in the dark, often spending most of their lives below ground. The last pit ponies in British mines did not retire until 1999. The museum's ponies, descended from the breeds that worked the mines, are some of the only animals in Britain still kept to remember that work. The strike at the museum in 2025 was for the workers; the ponies, then as now, mostly carried on. Brassed Off, the 1996 film about the survival of a Yorkshire colliery brass band after pit closure, was partly filmed here. The mining is gone from the Yorkshire valleys. The memory of it, in this one place, gets kept.