Martin received the instrument in 2005 when he won the Mark Twain Prize for American Humor.
The Kennedy Center banjo and another rare 1920s banjo will soon be part of a permanent display at the museum.
"To many people of the current generation, Steve Martin is the banjo. Being able to display and share one of his personal instruments - a banjo which melds both the musical and comedic sides of such a beloved and respected entertainer and musician -is truly an honor for us," museum director Johnny Baier said.
“The museum is fantastic and will be a really good home for this special banjo,” Martin said.
In honor of @SteveMartinToGo's banjo donation, here's a throwback to his induction into our Hall of Fame! Thanks, Steve!! pic.twitter.com/YKBkDaRCuD
— American Banjo Museum 🪕 (@BanjoMuseum) January 2, 2020
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