The founding charter of the Museum of Design and Applied Art states that the Museum is to collect and preserve the part of Icelandic cultural history related to design, especially from the beginning of the 20th century to the present day. The museum currently preserves around 5,000 objects. Approximately 3,000 items have been registered in Sarpur. These include furniture, ceramics, graphic design, textiles, fashion design, product design, jewellery design and architecture. In 2022, the museum acquired its first computer game, Eve Online.

Since its foundation in 1998 the Museum has received regular acquisitions. A large part of the collection comprises gifts, while the Museum also strives to purchase objects of importance in Icelandic design history.

The collection is unique on a global scale, as it is the only museum that systematically collects Icelandic design and related documentation regarding individual designers and their works. The museum preserves a range of items that are of significant cultural and historical importance. However, a substantial portion of the collection consists of random donations, and the collection is not yet fully cabable of presenting a comprehensive design history of a particular period, style, or design category. This is a work in progress.

Further efforts need to made to document contemporary and historical interior design and housing. Additionally, it is necessary to build a solid documentation archive on Icelandic architecture from the 20th and 21st centuries but unfortunately the museum does not have the resources to fulfill this role.

The permanent exhibition of the museum, called  “At home in the Design Museum” provides a good overview of the collection with around 200 objects on display.