Arizona resident Maria Dellos' bag disappeared in the mid-1990s after taking a trip to Las Vegas for a trade show.
The bag contained $US600 ($738) worth of art supplies she'd purchased from the show.
The NY Daily News reported her luggage was found in a dusty storeroom at Tucson International Airport by TSA agents.
Ms Dellos was "absolutely thrilled" to be reunited with her belongings, particularly since the two-decade-old paints were "still very creamy and usable".
The price tags for the paints at the time came at a less contemporary $US3.80.
"The price is of the past," Dellos says smiling. "I'm absolutely thankful to the TSA for calling me today and giving me great faith back into the airline industry," Tucson's KVOA reported.
She also discovered handwritten notes inside.
"When I looked at this note, it was dated, it dated me as 20 years ago! And I was just absolutely blown away," she said.
The baggage find was interesting as it actually pre-dated the TSA, which was set up to screen passengers and baggage across the US in 2001.
"It probably surfaced during a recent reshuffle of equipment at the airport," TSA spokesperson Nico Melendez said.
Modern day baggage handling is a highly automated process, with baggage tracked at nearly all stages of its journey.
About 21.8 million bags are mishandled by airlines each year, according to the latest figures for 2013 from air transport technology provider SITA.
This translates as just under seven bags mishandled for every 1000 passengers, which despite passenger numbers rising, is a figure that drops every year due to technology improving tracking methods.
Of these numbers, delayed bags account for 81.2 per cent, about 15.5 per cent of the bags are damaged, and 3.3 per cent are reported lost or stolen.
Baggage that cannot be identified and returned eventually finds its way to auction houses or outlets such as the huge Unclaimed Baggage Center in Alabama, in the United States.
However, the vast majority of mishandled baggage is returned to owners within a couple of days.
Transfers were identified by SITA as accounting for more than 50 per cent of mishandled baggage.
"Failure to load" is the second biggest cause of mishandled baggage, along with ticketing and tagging errors - none of which you can do much about.
Airlines and airports are working on technology to reduce the mishandling but it pays to avoid really tight connections.
One of the most important things you can do to decrease the chances of your luggage being lost is to ensure you have a tough baggage tag which includes your name, email address and a mobile phone number including the international code.