Shortly after Indiana University was established in 1820, a single room was set aside for a library, and a small collection was acquired through the generosity of donors. The first funds allocated by the state for library collections was an astonishing $75 a year.  By FY2023, funding for collections had reached a generous $15.4 million a year.  Despite three fires (in 1854, 1883, and 1969) that destroyed all or parts of the Libraries' collections, the Libraries' holdings now compare favorably with those of its peers in the Association of Research Libraries. The strengths in the Libraries' collections are due, in large part, to the Libraries' adherence to the goals and mission of the University itself. The first professor hired to teach at the State Seminary (the earliest incarnation of Indiana University), Baynard Rush Hall, argued for an education that produced "a liberal and thorough discipline of the mind." The libraries' healthiest collections derive from the faculty's and librarians' vision of the library as a home for the intellectual goods created by writers, researchers, and artists.

The Libraries' most noteworthy collections are those in the humanities, music, fine arts, and area studies. The William and Gayle Cook Music Library holds a major research collection of opera and vocal recordings, numerous opera scores, and the Latin American Music Collection, one of the world's largest collection of scores and recordings by Latin American composers.

The Herman B Wells Library is the home for the University's deep and wide-ranging collections in the social sciences, literature, language, fine arts and area studies. French, German, Italian, and Spanish holdings in language, literature and history are comprehensive, while the collections in Portuguese literature are especially robust. Research-level collections in English and American literature are strong, with the 19th and 20th centuries most fully represented.  The Fine Arts Collection holds materials in the visual arts, art history, architecture, and design, including circulating slides and over 2,500 artists' books.

The Folklore Collection at Indiana University Bloomington Libraries is the largest, most comprehensive working collection of its kind in the world. This collection of books, conference proceedings, newsletters, and journals from all over the world covers all genres and specializations in the disciplines of folklore and ethnomusicology. It supports Indiana University's Folklore Institute and the Department of Folklore & Ethnomusicology, which grew under the direction of pioneering folklore scholar Stith Thompson.

Since the 1930s, the University has attracted a large number of international students to Bloomington. This trend continued after World War II and during the Cold War. The curriculum, faculty research interests, and outreach programs all reflected these demographic changes. The development of the University's area studies centers reflected the University's interest in identifying itself with the international community. Most significant among the area studies collections is the Slavic Collection, covering Eastern Europe, Central Asia, and the former Soviet Union. Begun in the 1940s, it includes substantive collections in the vernacular languages of those geographic areas. Indiana University has been collecting Latin American materials since the late nineteenth century; the working collections on Latin America are complemented by the Bernardo Mendel and Charles Boxer Collections in the Lilly Library. Materials in Chinese, Japanese, and Korean support a major East Asian studies program, with especially strong holdings in language, literature, and collectanea. The University's program in Central Eurasian Studies is unique among universities in the United States, and library collections reflect this specialty. The non-Slavic countries of the former Soviet bloc, including Hungary, Turkey, Finland, Mongolia, and Tibet, are well-represented in the IUB Libraries, the Tibetan and Estonian collections ranking among the best in North American libraries.

The focus of the IU African Studies collection is Africa South of the Sahara, with materials in major world languages and hundreds of African languages, including thirty major African languages and language families. In addition to the cataloged collections, the African Studies collection contains uncataloged reprints, posters, telephone books, university catalogs and photographs. The IUB Libraries house one of the world's largest collections of Somali materials, with books, manuscripts, sound recordings, posters, and ephemera in both Somali and English, Italian and Arabic, the other languages that have been officially used in that country. Besides being a resource for scholars, this collection preserves the written record of a country whose cultural institutions have been heavily damaged by war. Other less-taught languages are represented in the Libraries' collections by substantial holdings in Hebrew, Hindi, Persian, Sanskrit and Arabic language and literature.

The IUB Libraries have been a U.S. federal depository library since 1881, and are depositories for the publications of the United Nations and the European Union, as well as other international governmental organizations. The Libraries' extensive holdings in the sciences support Ph.D. and research programs, while the business and education collections support the professional and service programs of the nationally-ranked Schools of Education, Business, and Public and Environmental Affairs.

In more recent years, librarians at IU have taken care to supplement the Libraries' holdings in traditional formats with commercially and locally-produced electronic resources. The Libraries provide access to more than 2,650 databases in electronic form, ranging from full-text general-interest sources that support the instructional needs of undergraduates, to specialized databases that bring primary sources and data files to the desktops of the University's faculty and graduate students.