Built in 1912 to meet the needs of Rūjiena Dairy Farmers' Society due to decreasing flax and grain prices worldwide, which made the farmers change their standard business and switch to cattle-breeding. The modern machinery installed indoors had a capacity of processing 10,000 litres of milk daily. Its construction cost 40,000 Gold Roubles.

Due to war and changing political regimes its further growth was suspended, and it re-opened on 1 February 1922. The dairy continued its successful operation to become the largest butter exporter in Latvia, exporting as much as 433.5 tonnes in 1939.

Since 1988, ice-cream "Rūjienas Saldējums" is produced, and the dairy is open for visitors to explain the ingredients and process of ice-cream production along with a tasty follow-up (sampling).