Mangkaja Arts began as an arm of Karrayili Adult Education Centre, first established in 1981 for local people who wanted to learn the English language. The initiative, led by the local men, provided a place where people could study and paint their personal stories, bush trips and histories. The artists began to sell their work from a building constructed threateningly close to the highway, on the main thoroughfare past the town. Artists worked with very few resources and travellers bargained directly with the producers of the works. The building was a modest concrete and tin structure with no windows, built with the assistance of a small capital grant from the Australia Council for the Arts. The building is also known locally as the "5O cent house", because its six-sided shape resembles a 5O cent coin.

Mangkaja Arts Resource Agency Aboriginal Agency was incorporated as a separate organisation under the Aboriginal Councils and Associations Act 1976, and given its name Mangkaja on October 25 1993. Mangkaja, a Walmajarri word for the 'wet weather shelters' erected by the Walmajarri people in the Great Sandy Desert during the wet season, was named by one of the art centre's founding members Kumanjayi (deceased) Skipper. The echidna in the Mangkaja Arts logo was Kumanjayi Skipper's totem.