The Cambodian Library was founded by King Sisowath in 1921, and was renamed the Royal Library in 1925. It formed a major part of the Buddhist Institute when the Institute was founded in 1930. In 1953, the Royal Library sent some treasures back to the Royal Palace Library and became the Library of the Buddhist Institute until 1975. With the war around the nation, from 1975-1979, the Institute was closed. After the war finished, in 1979, a government office was created called Cult and Religions Office which began to collect the books and old documents which still remained.

The Ministry of Cult and Religions was re-established in 1992 and the Office became part of the Ministry .The Buddhist Institute was reopened, temporarily located in the premises of Wat Unnalom. With the support of the Japan Sotosho Relief Committee (JSRC) and the Heinrich Boell Foundation (HBF) of Germany, the Institute soon began to re-establish the library and to open to serve its readers from that time.

The Institute moved to a new building, built with the support of Risho Kosei-Kai of Japan, adjacent to Hun Sen park in Phnom Penh in 1998.

The Library continues to collect documents including manuscripts, and publications that are valuable for the nation and its people. The library is a Special Library for Culture and Religion. It is also a public Library as it is open to serve not only monks and readers but all, including national and international researchers.

The Library is on two floors. Books relating to religion are kept upstairs and the rest are kept on the ground floor. Air conditioners have been installed to help preserve documents and for the comfort of readers. There is an electronic catalogue by Author, Title, Code Number and Key Words. Opening hours are from 7.30am to 11am and 2.30 pm to 5pm.

The Buddhist Institute Library cooperates in the exchange of documents and information, with the National Library, National Archives, Senate Library, National Assembly Library, Library and Information Center of French Cultural Centre, the Documentation Centre of the Ministry of the Education of Youth and Sports, the Hun Sen Library of the Royal University of Phnom Penh, the National Museum, the Library of the Cambodia Development Resource Institute and others inside and outside the country in particular the Library of the Institute of Southeast Asian Studies (ISEAS) in Singapore.

In modernizing its collection and to meet the needs of its readers and researchers, the Library has collected a wide range of books and documents from other organisations and purchased new books with donated funds:

- The sponsorship of the Heinrich Böll Foundation of Germany, has meant that the library has been able to create a Purchasing Committee for the library and also started to buy new books from bookshops every month.
- It receives books from other institutions, NGOs, and outside donors.
- It exchanges documents and information between Institutions, NGOs, especially the Library in Singapore (ISEAS).
- It has collected all publications of the Buddhist Institute, including papers from seminars and conferences organised by the Institute

The Library has also has collections of Journals, Bulletins and Magazines, in particular the magazine of the Buddhist Institute, Kambuja Soriya. This magazine includes information about traditional Khmer culture and Tripitaka scripture much of which is unavailable elsewhere.