St Fagans National Museum of History in Cardiff has been shortlisted for a £100,000 prize.
It is among five museums nominated for the Art Fund Museum of the Year 2019.
St Fagans completed a £30m redevelopment last year, adding new exhibitions and hands-on workshops to its collection of historical buildings.
The other shortlisted museums include the new £80m V&A Dundee. The winner will be announced on 3 July at a ceremony in London.
The list is completed by HMS Caroline in Belfast, Nottingham Contemporary and Pitt Rivers Museum in Oxford.
Organisers said the prize was regarded as “the most prestigious museum prize in the world”, and would award £100,000 to the winner as well as £10,000 to the other four on the shortlist.
St Fagans opened in 1948 and is home to a collection of Welsh homes, shops and other historical buildings.
David Anderson, director general of National Museum Wales, said he was delighted it had been selected as a finalist after a “significant year in the history of the museum”.
He said the £30m redevelopment had involved more than 3,000 volunteers and 200 community organisations, street charities and local groups from all over Wales.
“We see this not as a project but as a way of working for the whole organisation, which we will sustain and develop in the years ahead,” he said.
“It is our ambition for St Fagans to become a centre for cultural democracy, with a strong emphasis on opportunities for critical thinking and the practice of skills.”
It recently opened a medieval prince’s court, Llys Llywelyn, based on the surviving remains of Llys Rhosyr on Anglesey, while former Cardiff pub The Vulcan Hotel is currently being built.
The museum looks set to beat last year’s figure for visitor numbers, which was 573,525 for the year ending in March 2018.
Mr Anderson added that the new galleries provided a much broader representation of the sweep of human history in Wales than before, from the first Neanderthal hunters to contemporary multicultural society.
Chairman of the judges and director of Art Fund, Stephen Deuchar, said: “The five shortlisted museums have each offered outstanding and different approaches to the vital task of engaging with the widest public in new and adventurous ways.
“We congratulate all those who are on the shortlist and encourage everyone to go and visit them.”