The Klausen Synagogue was built by Mordechai Maisel in 1573 in honour of Emperor Maximillian II visiting the Jewish Ghetto, Josefov, which was an almost unprecedented move. It is located directly next to the Jewish cemetery, as there was a lack of space in Josefov. In addition to the Synagogue, Maisel also built a Yeshiva and a Mikvah. The German word Klaus means small, and therefore this small synagogue was called Klausen.

Having built the new Yeshiva, Maisel needed a Rabbi to become Rosh Yeshiva, and in 1573, he turned to the Chief Rabbi of Nikolsburg and the Province of Moravia, Rabbi Yehudah Loew ben Bezalel, otherwise known as Maharal. Maharal had no official position within the Prague Jewish community, but gained a huge amount of respect for his studiousness and for his leadership of the Klausen Yeshiva. Under Maharal's leadership, the Yeshiva revolutionised Jewish learning in Europe.

Maharal used his position of Rosh Yeshiva in order to give sermons. His sermons very often attacked the lay leadership of the town, particularly the members of the burial society, the Chevra Kadisha, because of their corruption. This resulted in the Klausen gaining higher attendance than the Chief Rabbi Isaac Melling's Altneu!

Historically, the Klausen Synagogue was most often used by the Chevra Kadisha. Being involved with a Chevra Kadisha is thought to be one of the highest acts of charity, since it is totally selfless and cannot be repaid. The connection between the two was forged in Maharal's reorganization of the Chevra Kadisha, the fact that both buildings had been financed by Mordechai Maisel, the proximity of the two buildings and the fact that they were both being constructed at the same time.

The original buildings were lost in "the flood of fire" in 1689, and so the Mikveh is no longer present. The current Synagogue, which stands on the site of the old Klausen buildings was finished in 1694, and was, at the time, the largest Synagogue in Prague. The Ark, or the Aron HaKodesh, was financed by the famous merchant, Samuel Oppenheim, and was built in the Early Baroque style.

Until 1939, the synagogue was consecrated as a Reform Synagogue, but after Czechoslovakia was conquered by the Nazis, the Klausen, along with many of the other communal buildings in Josefov was commandeered by the Nazis to form a Museum to the Extinct Race. Specifically, the Klausen would have been an exhibition called "Jewish Life from the Cradle to the Grave". The exhibition was curated by local Jews, who showed the Jews in a humanist and inspiring light which naturally angered the Nazis because they had wanted the museum to present the Jews as avaricious, unfeeling and evil. The whole exhibition was therefore changed.

Today the Synagogue forms a part of the Jewish Museum of Prague, ironically enough utilising the treasures of Judaica ransacked from the surrounding communities by the Nazis.

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