The Library and the Manuscripts Sections are situated on the 2nd floor. It was given the shape of a well-knit and full-fledged library by Nawab Mir Turab Ali Khan, Salar Jung I, which was further augmented and developed by his son Nawab Mir Laiq Ali Khan, Salar Jung II and finally by Nawab Mir Yousuf Ali Khan, the Salar Jung III. The origin of some of the collection dates to 1656 A.D. The Salar Jung Museum Library includes a collection of books and manuscripts acquired by the Salar Jung's family. Calligraphers, artists and book binders all did their best in showing their respective arts and have thus paid their tributes to the written word.

It contains many gems of calligraphic art and ornate embellishment items with gorgeous decoration and an artistic blending of colours with a profuse use of gold, mineral colours that lavishly used lapis lazuli for blue, pearl for white, shangraf for red and Zabarjad (emerald) for green. The manuscripts collection in the library, which possesses unique Specimens, is one of the richest in the world in terms of its quality.

Salar Jung Museum Library opened to the public in 1961 by an Act of Parliament.

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