The Montana Liquor Control Act, passed in 1933 by the Twenty-third Legislative Assembly, created the state liquor control system as one of the nation's seventeen "monopoly" states. Within its monopoly the state of Montana operated liquor stores, licensed individual purchases and retailers, exercised regulatory powers, and merchandised alcoholic beverages. The sale of beer was administered by the Board of Equalization, while state liquor stores were under the jurisdiction of a board composed of the governor, the attorney general, and the secretary of state.

At the time of the enactment of the Liquor Control Act, only the sale of beer was permitted in Montana's taverns. In 1937 the passage of the Retail Liquor Act amended the 1933 legislation permitting the sale of liquor-by-the-drink and packaged liquor by licensed taverns. Simultaneously, the administration of state liquor stores was transferred to the newly created Montana Liquor Control Board (MLCB), which consisted of three members appointed by the governor and confirmed by the Senate. The first meeting of an appointive Liquor Control Board was held on April 5, 1937. The MCLB appointed an administrator who handled the day-today operation of the state liquor control system, but who was answerable to the board.

The MCLB employed a team of inspectors, also called examiners, who worked under a chief inspector and his assistants. The principal duty of the inspectors was to screen applicants for liquor licenses by making a thorough investigation of the applicant's eligibility under state regulations. The inspectors also made two or three annual, on-site inspections of the premises where beer and liquor licenses were in operation.

As a result of the reorganization of state government following the ratification of Montana's 1972 Constitution, the MCLB was abolished by the 1973 Legislative Assembly, and its functions were transferred to the State Department of Revenue's Liquor Division.