The foundation-stone of the Hungarian Railway Museum was laid on 22 November 1999, on the site of the former Budapest North Depot of the Hungarian State Railways (MÁV). The first phase of the project was completed in less than eight months, funded by the Ministry of Transport and Waterways, MÁV and MÁV Nosztalgia Ltd, the heritage division of MÁV. After many months of effort, Europe's first interactive railway museum opened on 14 July 2000, displaying over a hundred railway vehicles and equipment of varying ages on a site of over 70,000 m2.

Fortunately the North Depot's 1911 roundhouse remained intact and its 34 bays provided an ideal home for the operational vintage fleet. This includes a steam engine built in 1870 and the legendary Árpád railcar, built in 1934, which sped from Budapest to Vienna in just under three hours. The gem of the vintage fleet is the elegant teak dining car built for the Orient Express in 1912.
The fleet is comprised of fifty engines, twelve operational and thirty-eight cosmetically restored, plus a wide range of rolling stock: railcars, self-powered rail cars and hand-carts, inspection cars, steam cranes, snow ploughs and other curiosities. The exhibits take visitors through the entire history of the railways from the steam engines of the 1870s to the powerful electric engines of today. Many of the vehicles are still in working order and used on the nostalgic train trips organised by MÁV Nosztalgia Ltd. in Hungary and abroad.

Visitors can not only admire the old machines: they can also try them out. They can drive a steam engine, travel in a car converted for rails, operate a hand-cart, ride on the turntable and on the horse tram. The engine simulator offers a virtual experience of driving the most powerful Hungarian electric railway engine, using the original equipment, while the rail-cycle challenges one's sense of balance. There is also a model railway that visitors can admire and even operate in the maroon postal wagon.
The beautifully landscaped park is ideal for relaxation, and refreshments are available in the Buffet or on the terrace of the Nostalgia Café.
Those who would like to take the experiences and ambience of the museum home with them can chose from railway souvenirs, postcards and books in the Nostalgia Shop.

From 1 April to 31 October, a vintage diesel shuttle train runs between Budapest's Nyugati Station and the museum , adding more fun to the visit and ensuring easy access.