The Ministry of Culture of Azerbaijan SSR established the Shusha branch of the Azerbaijan State Museum of Carpet and Applied Art under order №502 on September 26, 1985 to study, protect, and save the traditions and art of ancient Karabakh carpet weaving. The branch began its activity on May 19, 1987 in an 19th-century mansion owned by General Samad Bey Mehmandarov.

The Shusha branch displayed pile and flat-woven carpets, carpet products, embroidery, traditional costumes, jewelry, and artistic metal works selected from the treasury of the Azerbaijan State Museum of Carpet and Applied Art.

The military conflict between Azerbaijan and Armenia caused the branch to terminate its activity in 1992. On February 29, 1992, 183 of 246 objects from the Shusha branch (80 pile carpets, 35 flat-woven carpets and carpet products, 29 samples of embroidery and traditional costumes, and 39 pieces of jewelry) were evacuated and transferred to the museum’s main fund.

Today, the Shusha branch operates within the Azerbaijan Carpet Museum.