The British Museum became a construction site as Sir Robert Smirke's grand neo-classical building gradually arose. The King's Library, on the ground floor of the East Wing, was handed over in 1827, and was described as one of the finest rooms in London although it was not fully open to the general public until 1857, however, special openings were arranged during The Great Exhibition of 1851. In spite of dirt and disruption the collections grew, outpacing the new building.[citation needed]

In 1840 the Museum became involved in its first overseas excavations, Charles Fellows's expedition to Xanthos, in Asia Minor, whence came remains of the tombs of the rulers of ancient Lycia, among them the Nereid and Payava monuments. In 1857 Charles Newton was to discover the 4th-century BC Mausoleum of Halikarnassos, one of the Seven Wonders of the Ancient World. In the 1840s and 1850s the Museum supported excavations in Assyria by A.H. Layard and others at sites such as Nimrud and Nineveh. Of particular interest to curators was the eventual discovery of Ashurbanipal's great library of cuneiform tablets, which helped to make the Museum a focus for Assyrian studies.[21]

Sir Thomas Grenville (1755-1846), a Trustee of The British Museum from 1830, assembled a fine library of 20,240 volumes, which he left to the Museum in his will. The books arrived in January 1847 in twenty-one horse-drawn vans. The only vacant space for this large library was a room originally intended for manuscripts, between the Front Entrance Hall and the Manuscript Saloon. The books remained here until the British Library moved to St Pancras in 1998.

The opening of the forecourt in 1852 marked the completion of Robert Smirke's 1823 plan, but already adjustments were having to be made to cope with the unforeseen growth of the collections. Infill galleries were constructed for Assyrian sculptures and Sydney Smirke's Round Reading Room, with space for a million books, opened in 1857. Because of continued pressure on space the decision was taken to move natural history to a new building in South Kensington, which would later become the British Museum of Natural History.

Roughly contemporary with the construction of the new building was the career of a man sometimes called the "second founder" of the British Museum, the Italian librarian Anthony Panizzi. Under his supervision, the British Museum Library (now the British Library) quintupled in size and became a well-organised institution worthy of being called a national library, the largest library in the world after the National Library of Paris.The quadrangle at the centre of Smirke's design proved to be a waste of valuable space and was filled at Panizzi's request by a circular Reading Room of cast iron, designed by Smirke's brother, Sydney Smirke.

Until the mid 19th century, the Museum's collections were relatively circumscribed but, in 1851, with the appointment to the staff of Augustus Wollaston Franks to curate the collections, the Museum began for the first time to collect British and European medieval antiquities, prehistory, branching out into Asia and diversifying its holdings of ethnography. Overseas excavations continued and John Turtle Wood discovered the remains of the 4th century BC Temple of Artemis at Ephesos, another Wonder of the Ancient World.

The natural history collections were an integral part of the British Museum until their removal to the new British Museum of Natural History, now the Natural History Museum, in 1887. With the departure and the completion of the new White Wing (fronting Montague Street) in 1884, more space was available for antiquities and ethnography and the library could further expand. This was a time of innovation as electric lighting was introduced in the Reading Room and exhibition galleries.