In 1979 the Montana Legislature passed a joint resolution "directing the Montana Arts Council to initiate a program of commemorative wall niches in the state capitol" honoring individuals selected by the Council as outstanding Montanans. A total of $5,000 was allocated from coal severance tax revenue to fund the commemorative niches. In March 1980 the Capitol Building and Planning Committee gave approval for the use of nine niches in the west gallery of the Capitol. Beginning in April nominations were solicited through legislators, libraries, and the general public and 58 completed nominations were received. An additional 40 nominations were made by the selection committee made up of members of the legislature and others. Montanans nominated were "to have made significant achievements in their lives, including such diverse areas of activity as science, education and scholarship, business, politics and public service, sports, media, entertainment or the arts."

The committee selected nine persons for the first display and decided that these should be rotated on a regular basis as money was available. The first honorees were Gary Cooper, Chet Huntley, Mike Mansfield, H. G. Merriam, Chief Plenty Coups, T. C. Power, Charles M. Russell, Harold Urey, and Brother Van Orsdel. Dedication ceremonies were held on January 29, 1981. In 1981 the legislature transferred responsibility for the Outstanding Montanans Commemorative Program to the Montana Historical Society. Believing that the nominees prepared by the Council for rotation into the niches were "inadequate," the Society reopened the nominations in 1982. From the new nominations, two were selected to be placed in the Capitol; Marcus Daly and Maggie Smith Hathaway replaced Mansfield and Urey. The rotation of two new honorees was scheduled to take place every two years.