The Mennonite Heritage Village was founded in 1964 by the Manitoba Mennonite Historical Society in an effort to preserve the heritage and tell the story of the thousands of Mennonites who arrived immigrated to Manitoba, first in 1874, and again in the 1920s. These groups of Mennonites were escaping financial and political hardships in Prussia/Russia (particularly in the area that is now Ukraine), and were offered opportunity to live on two reserve lands in southern Manitoba. The museum was created through funding by local Steinbach business leaders, support from the Manitoba Mennonite Historical Society, and Provincial funding. Much of the early museum development was led by its first curator, John C. Reimer, a retired teacher and local historian from Blumenort, MB. In conjunction with provincial funding gifted by the Right Honorable Edward Scheyer PC CC CMM OM CD, the museum developed into a 40-acre site with over 30 historic buildings, and one of the few working windmills in North America.
The MHV has historically been a site of the preservation of Plautdietsch (Low German) arts, and seeks to host annual events with readings from Plautdietsch texts, plays, and musical acts. This language is increasingly less commonly spoken among Mennonites in Manitoba today, but is still widely used among Mennonites in Mexico, Belize and Paraguay, as well as in Holdeman communities of southern Manitoba.