In 1969, the Israel Museum decided to establish an official Numismatics Department under the curatorship of Ya'akov Meshorer. The purpose of such a department was, and still is, to exhibit the important numismatic material of ancient Israel, with an emphasis on Jewish coinage, while building a comprehensive collection of coins with a focus on those that circulated or were struck in this country over the ages. Therefore the Museum began by seeking out the existing collections of connoisseurs who had assembled choice pieces. The Numismatic Collection and Exhibit of the Israel Museum was created, in a generous response to our efforts, primarily through donations from different sources. The Numismatic Collection of the Israel Museum included by the end of 2000 around 25,000 items. The collection can be divided into seven principal groups: Greek, Jewish, Roman Provincial, Islamic and Polish coins, financial documents of Ottoman and Mandatory Palestine, and stamps of the state of Israel.

The main purpose of the Numismatics Department is to exhibit historically important coins in a way that conveys their significance. This has been done not only by changing the permanent exhibits from time to time but also by mounting small or major exhibitions on specific subjects. In addition, smaller coin exhibits are frequently integrated into other parts of the archaeological displays.
Main exhibitions presented by the Numismatics Department have included: "Imaginative Coins and Fantasy Shekels"; "The Production of Coins in the Ancient World"; "Coins of Israel, Old and New" (in cooperation with the Bank of Israel); "City Coins of Eretz Israel and the Decapolis"; "The Coins of Aelia Capitolina - Roman Jerusalem"; "More than Money"; and the Permanent Coin Pavilion. The Department has also arranged for an exchange of exhibitions between the National Museum of Mexico and the Israel Museum (on behalf of the Bank of Israel) and an exhibition of Jewish coins in Munich - "Das Heilige Land" (in cooperation with the Staatliche M?nzsammlung M?nchen) .

The Numismatic Department plays a major role in the archaeological research in Israel by studying and publishing important material from its collection as well as working on material from excavations in Israel. In collaboration with the Franciscan Biblical School in Jerusalem, the department is also involved in publishing the numismatic material found in its digs in Jordan.