Five hundred years ago today, the corpse of King Henry VII, wasted by tuberculosis and ravaged by cares, was laid in state in the chapel at Richmond Palace. By the next morning Britain was exulting in the accession of a new king.

“Heaven smiles, earth rejoices; all is milk and nectar,” declared one ecstatic courtier. Henry VIII, huge, fiery and handsome, with an affable nature and a liberal bent, could hardly have cut a stronger contrast with his miserly father. Here was a monarch to preside over a new golden age.

This is the gilded youth whom we meet at the beginning of the latest British Library exhibition: a fair-skinned, auburn-haired king of much vaunted beauty; rigorously educated, devoted in his faith, skilled on the sporting field, brave in the hunting field, undaunted on the battlefield and on the verge of being wed to his elder brother's widow to protect an Anglo-Spanish alliance.

How did this charismatic young paradigm of the great Renaissance prince slowly transform into the ruthless wife-killer whom we see at the end, his suspicious eyes peeping from swollen fleshy pouches, his temper tested by suppurating leg ulcers and with the blood of loyal martyrs on his pudgy ringed hands?

The British Library, drawing on its own amazingly rich holdings (Henry's own library, complete with his many annotations, is at the heart of its collection) as well as a host of other lent treasures, tells one of the most important stories in British history. In Henry VIII: Man and Monarch it follows the life of our best known king from the first baptismal record to his final will. It probes behind popular legends of a chicken-bone-chucking monster to look at events from the monarch's perspective, setting his ambitions in the context of those whom they affected. It explores the political, intellectual, religious and cultural developments that were to shape our nation for the next 500 years.

This is just one of several exhibitions to celebrate the quincentenary of Henry's accession. Maybe, at a glance, it might seem the least easily enticing. How can a series of documents displayed in the British Library's rather drab basement galleries compete with the mise en scène that a former royal palace can offer? Hampton Court, Henry's preferred residence and the site of three of his honeymoons, marks this same anniversary with Heads and Hearts, an atmospheric exhibition focusing on his sixth marriage and backed up by a lively programme of costumed re-enactments, while in Dressed to Kill the Tower of London, the fortressed backdrop to many of this monarch's most bloodthirsty deeds, puts on an impressive show of his personal arms and armour.

The British Library curators - including the guest curator David Starkey - are clearly aware of populist expectations. Man and Monarch moves beyond manuscripts, books and documents, adding several fine paintings and miniatures (some by Holbein), a few pieces of sculpture and some scientific instruments, the odd bit of jewellery or armour, the occasional item of furniture as well as a magnificent tapestry hanging to the mix. It creates an atmospheric layout that echoes some royal procession (its narrow corridors will, unfortunately, probably become as crowded), and includes a few interactive exhibits and a rather unnecessary hands-on jousting experience that invites spectators to mount on a pommel and pick up an extremely unwieldy lance. But in the long run this show takes a more scholarly course. It is probably all the more profoundly stirring for that for here, for anyone with a modicum of imagination and a basic interest in the period, are objects to send a frisson down the spine.

Several of the most splendid, most evocative or most significant documents of the era go on display. Here, in the frontispiece of a prayer book designed for Henry in the last years of his marriage to Katherine of Aragon, is one of the finest examples of Renaissance illumination produced in this country. There, in a prayer roll belonging to the teenage prince and never displayed in public before, is a testimony to his pious belief in popular Roman Catholic devotions that later, as a king, he would set out to destroy. Here is the 1534 Act of Supremacy: a single paragraph of visually unremarkable script without the seals, stamps or ribbons that aggrandise other documents. And yet, declaring the King (rather than the Pope) to be the head of the ecclesiastical hierarchy it is about the most revolutionary statute in our parliamentary rolls.

The hang of this show helps to dramatise its tale. The portrait of a middle-aged Katherine, well past child-bearing, is hung near that of a glamorised Anne Boleyn. How appealing this temptress must have seemed to the frequently unfaithful King. A page of his prayer book - he chooses an image of the Man of Sorrows - finds him sending flirtatious messages to his beloved. “If you remember my love in your prayers as strongly as I adore you, I shall hardly be forgotten, for I am yours,” he writes in the squarish Italianate script that visitors to this show will come to recognise so well. One of his rare love letters lies alongside, in which he declares his great delight at a pledge that she has sent him. And near to that is one of Henry's lavishly decorated portable writing desks. For a moment the atmosphere seems so intimate that, closing our eyes, we can glimpse the lovers' illicit smirks.

Wall texts and a clear, well-illustrated catalogue encourage spectators to seek wider implications of displays. The Valor Ecclesiasticus, a comprehensive survey of the income of the English Church, might not be much to look at. But Henry would surely have been dazzled at the proof of such wealth. This document had profound repercussions. It led to the dissolution of the monasteries, as a few sculptural fragments salvaged from Glastonbury Abbey, one of the largest and richest Benedictine institutions, make clear. A document declaring the voluntary surrender of Thetford Priory to the crown is particularly evocative. Henry Fitzroy, the King's much loved bastard son, had only recently been buried there. One might have thought that, given the resonance of the spot, he might have spared it. Instead Henry persists with a brutal determination.

The more closely you look, the more historically fascinating, the more emotionally moving, the more atmospherically vivid this show starts to feel. Every smallest detail is a piece of a puzzle, from the slip of the hand by which a grandmother wrongly records baby Henry's birth date (he was the spare not the heir and so did not matter like his elder brother), through the dashed annotations that angrily refuse a defence of his wife, to the announcement of the birth of Elizabeth in which the King, with premature optimism, declares the birth of a new prince and has to squeeze in an “s” at the end when it turns out that a daughter has been born.

So forget mere historical re-enactments. This show demands detailed examination and attentive reconstruction. It will take a lot of time - and probably involve terrible queues. But it is worth it. Slowly it constructs a drama that takes place in the viewer's imagination. This is a show to nurture the enthusiasms of a new generation of historians. It reveals quite how deep a few old documents can go.

Henry VIII: Man and Monarch is at the British Library, NW1 (01937 546 546), from Thursday to Sept 6

http://www.bl.uk/henry

Editor's choice

• The 100 Best Films of the Decade
• 70 facts you didn't know about Marvel
• The 50 Biggest Movies Of 2010