The origins of the Indiana University Folklore Archives lie in materials assembled initially by Richard M. Dorson at Michigan State in East Lansing, brought to Bloomington in 1957 when Dorson arrived to take over leadership of the Folklore Institute. This initial collection comprised approximately 1,000 student field transcription projects from his American Folklore course (1947-1956). MSU retains copies of these projects. As Dorson set about converting the Folklore Institute into a full-fledged academic department, Dorson placed the Folklore Archives at the center of the operation. Throughout the 1960s, an outstanding crop of graduate students were required or encouraged to deposit field materials collected for their seminars in the Folklore Archives.

Over the coming decades, under the care of the Indiana University Folklore Institute, the Folklore Archives were staffed by a combination of paraprofessional staff and graduate students and the collection grew to include nearly 40,000 field collections, most in typewritten form, collected in Indiana, Michigan, Ohio, and Kentucky. The Archives received deposits of special collections and general materials (between 300-400 collections per year) from both professional and amateur field researchers. Many of the deposits were from projects undertaken by students at Indiana University in Bloomington, Fort Wayne, Kokomo, Columbus, and Indianapolis; however, the Archives also received collections from individuals not associated with the university.

In 1980 the Folklore Institute received a grant from the NEH to create a computerized catalog for the Archives. In 1990, the Folklore Archives closed due to a lack of financial support for staffing. In 1992, the Archives were physically moved to the Archives of Traditional Music at Indiana University (ATM) and efforts were made to support the collection through grant funding which was largely unsuccessful. The records were transferred to the Indiana University Archives in 2003, where they now reside and continue to grow.