The exhibition features historical objects, documents and restored heritage highlighting the social, economic and cultural changes that shaped Cres in the 19th century.
Following four centuries under Venetian rule, the island became part of the Austrian Empire and began a period of modernisation, organisers said.
The exhibition explores the era when Austrian administration brought major changes to Cres, including the opening of the first schools, the introduction of cadastral records and the establishment of regular steamship connections, helping the island overcome centuries of transport isolation.
By the mid-19th century, Cres reached a historical peak as a thriving administrative centre with developed crafts and shipbuilding, with the town's population rising to around 5,000.
Visitors will also learn how improved infrastructure paved the way for tourism, which began with health-related seaside stays before gradually evolving into a leisure activity.
The exhibition runs through 15 October.