The Hall of Mirrors was installed in 1909 in a villa built in 1884 by Martin Haller. Henry and Emma Budge had bought the villa around 1900 and commissioned the Hamburg architect to expand it into a palais. The Jewish couple used the banqueting hall to host balls, concerts, and charity events. Three glass double doors opened the pavilion towards the garden. Mirrors were mounted on the doors at the back of the room in order to optically enlarge the space. The term “Hall of Mirrors”  Spiegelsaal is derived from this particular architectural feature, which is modeled after French 17th century palace architecture. At Emma Budge's request its interior decoration was carried out by Paris decorating firm Alavoine & Cie. The wall and ceiling decorations are mainly designed in the classicist and rococo styles. Their floral elements, the allegories of the seasons, and the muses in the lunettes under the ceiling refer to the garden landscape that extended in front of the pavilion. This combination of styles so characteristic for the period of historicism is realized in a particularly charming way by the contrast of the classical austerity of the villa's architecture with its playful interior decoration. Until 1980 the Hall of Mirrors Spiegelsaal was part of the villa, which has housed the State School of Music  Staatliche Hochschule für Musik (today: Hamburg School for Music and Theater [Hochschule für Musik und Theater Hamburg]) since 1959. When it had to make room for an addition, the Museum for Arts and Crafts Museum für Kunst und Gewerbe (MKG) in cooperation with Hamburg's authority for the protection of historic landmarks  Denkmalschutzamt moved it to the museum, where it has been installed in the northern courtyard since 1987.

Representative of many similar cultural goods and artefacts, the history of the Hall of Mirrors Spiegelsaal illustrates the acculturation of Jewish families who once were part of Hamburg's upper-class citizenry. It is also the history of a lengthy struggle for restitution and compensation. As a cultural historical source, the Hall of Mirrors Spiegelsaal represents the kind of upper-class bourgeois living that illustrates how deeply rooted Hamburg's acculturated Jews were in the city's arts and cultural life.