The campaign to establish a national library for Wales began in 1873, when a committee started collecting Welsh material at University College, Aberystwyth. The effort took decades. In 1905, the government finally committed funding to establish both a National Library and a National Museum of Wales. David Lloyd George, who would later become Prime Minister, championed Aberystwyth as the library's home. The founding charter contained a safeguard: if the library were ever moved from Aberystwyth, the manuscripts donated by its principal benefactor, Sir John Williams, would revert to the university. King George V and Queen Mary laid the foundation stone on 15 July 1911, and architect Sidney Greenslade's building on Penglais Hill was ready by August 1915. The transfer of collections was completed on St David's Day, 1 March 1916.

The building's North Reading Room, where printed books are consulted, stretches 175 feet long, 47 feet wide, and 33 feet high, with galleries at three levels above the floor. Portland stone on the upper storeys contrasts with Cornish granite below, giving the building a solidity that matches its purpose. The Library was granted legal deposit privileges under the Copyright Act 1911, meaning it could claim copies of publications with Welsh and Celtic relevance. By 1987, these restrictions were removed entirely, placing the National Library of Wales on equal footing with the Bodleian, Cambridge University Library, and the National Library of Scotland. It was also the first library in Britain to adopt the Library of Congress Classification system, doing so in 1913.

During the Second World War, the library became a sanctuary for some of Britain's most irreplaceable cultural treasures. Architect Charles Holden designed a heated and ventilated tunnel into the rock outcrop behind the building, funded jointly with the British Museum. From July 1940 to May 1945, the tunnel sheltered consignments from the British Museum, forty-six boxes of manuscripts and books from Corpus Christi College Cambridge, and over a thousand paintings, eighty-two boxes of books, and twenty staff members from the National Gallery. Distinguished scholars from the British Museum accompanied their collections to Aberystwyth, creating an unlikely wartime concentration of intellectual talent in a Welsh seaside town far from the Luftwaffe's reach.

The library's manuscript collection anchors the entire written history of the Welsh language. The Black Book of Carmarthen preserves the earliest Welsh poetry. The Book of Taliesin and the Hendregadredd Manuscript extend the record further. The White Book of Rhydderch contains the earliest version of the Mabinogion, the foundational text of Welsh mythology. The Peniarth collection alone comprises 561 volumes, four-fifths of them assembled by the antiquary Robert Vaughan in the 17th century. More than half of all known manuscripts containing the laws of Hywel Dda reside here, including the earliest extant text of native Welsh law, dating from around 1300. The Llanbeblig Book of Hours, compiled around 1390, is the only known illuminated manuscript containing the Lily Crucifixion motif. In 2010, the Peniarth collection was inscribed on the UK Memory of the World Register by UNESCO.

The library continues to evolve. Its South Reading Room, once used for consulting archives and maps, now houses the Wales Broadcast Archive Centre, preserving programs from BBC Wales, ITV Wales, and S4C dating back to the 1920s. The Gregynog Gallery on the second floor displays rotating exhibitions drawn from the library's collections, from medieval tiles to early Welsh printed books, including Yny lhyvyr hwnn from 1546, the first book ever printed in Welsh. The grounds themselves are Grade II listed, the landscaping designed as an integral part of the building's architectural vision. On this windswept hill above Cardigan Bay, the accumulated record of Welsh civilization sits in climate-controlled rooms, a safe distance from the storms that batter the coast below.