The archaeological site of Gorkhuttree is located at the heart of walled city of old Peshawar. It is the highest place in Peshawar having a huge deposit of the historic periods commencing from the Indo-Greeks or even earlier. The first excavations at this site were conducted in 1994-95
and thereafter series of excavations took place in the subsequent years. The city Museum is established inside the Gorkhuttri complex. The existing structure of the complex was established by Begum Jehanara, the beloved daughter of the Mughal Emperor Shahjahan in 1640 A.D. It was established as caravanserai for the merchants who came to Peshawar from central Asia and Afghanistan etc. The complex was originally consisting of two monumental gateways and a series of small cells on four sides, a Jamia Masjid and Hamam. However, today only the gateways and some small cells are remaining while the rest of the area is occupied by modern construction and a Hindu temple.
The Museum was inaugurated on 23rd March 2006 by the then Chief Minister Mr. Akram Khan Durrani. The museum is consisting of two small galleries i.e., the Archaeological and Ethnological, while a third gallery is recently added for the exhibition of the antiquities of the British time. The archaeological gallery of this museum represents a continuous profile of the Peshawar Valley in the form of excavation material recovered from the site of Gorkhuttree. This excavation was conducted by the Directorate of Archaeology and Museums Government of Khyber Pakhtunkhwa in 2002-2011.
The second gallery is of ethological culture of Peshawar, where household objects, traditional dresses, armaments, ornaments, musical instruments, arts, and craft objects are displayed.