Lüdenscheid is a town in the Sauerland, and forms part of the Märkischer Kreis in North Rhine Westphalia, 46 km east of Wüppertal and 60 km north-west of Siegen. It lies amongst mountains on the watershed between the rivers Lenne and Volme, both of which are tributaries of the Ruhr. In the Middle Ages Lüdenscheid was a member of the Hanseatic League, and from 1609 it belonged to the Elector of Brandenburg. In due course it became part of Prussia, and from 1815 formed part of the Prussian province of Westphalia.
The water-powered ironworks in the area specialised in producing Osmund iron that was drawn into wire that was used for the manufacture of buttons and buckles. The main focus of the industrial exhibits in the historical museum is on the making of buttons and buckles, not just those that included iron wire but buttons made from aluminium, and from Bakelite and other plastics. There is also a steam locomotive once used on the line from Lüdenscheid to Altena, and an early airship engine that was built in Lüdenscheid. There are live demonstrations of metal-working and every August a smithy day is held to honour blacksmiths.
The museum has links with Phänomenta, an interactive science and technology centre which is located nearby.