This institute was founded in 1939 as the Institute of Lithuanian Studies with three departments: Lithuanian language, Lithuanian history, and Lithuanian folklore. After the Lithuanian Academy of Sciences was established in 1941, these departments became part of the Academy as the Institutes of the Lithuanian Language and of Lithuanian Literature. In 1952 both institutes were joined together to form the Institute of the Lithuanian Language and Literature, and in 1953, after the folklore group was transferred from the Institute of History, the Department of Folklore was established. This institute was headed by K. Korsakas (until 1984) and J. Lankutis (1984-1990). The current Institute of Lithuanian Literature and Folklore has officially existed since April 16, 1990, when the Institute of the Lithuanian Language and Literature was reorganized. Algis Kalėda has been the director of the Institute since December 2001.
The main areas of activity of the Institute of Lithuanian Literature and Folklore include conducting research into historical and theoretical problems of folklore, increasing and preserving the folklore archive, and editing fundamental folklore publications.
Research fellows from the ILLF’s Department of Folk Songs, Department of Folk Narrative, and Department of Folklore Archives are involved in the RaSa project. The Institute of Lithuanian Literature and Folklore maintains the biggest repository of folk materials in Lithuania - Lietuvių Tautosakos Rankraštynas.