The Old Butter Factory was built in 1918 by the government Department of Agriculture to replace a previous privately owned dairy, Western Australia's first butter factory and creamery, that was established in 1898. The factory also operated as an ice works for local residents and fishermen before the widespread availability of mechanical refrigeration. It ceased butter-making operations in 1952 and became a cream depot and dried milk plant, then a truck depot. In 1974 it was sold to the Shire of Busselton, which leased most of the building to the Busselton Historical Society; they opened the Busselton Museum there in 1975. In 2018, the building was heavily damaged by fire. the outside areas were re-opened in 2019 and the rest of the building was re-opened in 2020.