The entrance is through a ramshackle furniture shop; I walk between tables into the back and up the stairs. We're in the middle of Zurich's old town, where cheek-by-jowl buildings with uneven floors and low doorways are de rigueur; having the opportunity to snoop around one is an unusual treat. An Adrian Paci photograph is propped up against the wall in the ground-floor shop, the first of more than 60 artworks positioned around dozens of rooms in the two adjoining buildings which date from the 14th century. Upstairs, Mai-Thu Perret's Negativland (Isolation Bungalow Furniture), 2004, a cluster of dipped black Chinese lanterns with luxurious trailing tails, crowds into the first room. In the context of rich red carved wooden panels, assorted plaster busts, maps, a series of Neue Zürcher Zeitung (newspaper) covers recreated by Claudia and Julia Müller in 2004, heavy bar furnishings, one cabinet displaying Francis Alÿs's drawings, another the white polyurethane record Fischli/Weiss produced in 2004, and several potted triffids trying to escape their pots, the room is a walk-in Wunderkammer, a collection of unclassified curiosities.

Everywhere you look is the detritus of the building's many lives and residents, from empty magnums to chemical glassware, ice picks to cast-iron stoves, some of it stored, some seemingly abandoned, some perhaps still in use. Amid this chaos, a number of the works mimic their surroundings: Raffi Kalenderian's Mom, 2009, hangs alongside portraits of anonymous ancestors; Teresa Margolles's Tela, 2010, an embroidered blood-soaked cloth, finds its doppelganger in the priest's vestments hanging nearby. Other works take full advantage of the temporary set to create dramatic installations, such as Zilla Leutenegger's Marcia, 2010, a miniature projected figure tightrope walking along the pipe above a sink. Meanwhile, Fabian Marti's drawing The Now, 2009, and sculpture Contemplating the Now, 2010, bask in the attention of several rows of fine, albeit moth-eaten, rattan chairs.

The story goes that Michelangelo's nose, the title of this show, was broken by fellow art student Torrigiano after he took a disliking to Michelangelo's superior attitude regarding his peers. Both their lives were to be marked by the encounter: Torrigiano was banished from Medici-dominated Florence and Michelangelo forever disfigured. Hugo Ball's play Die Nase des Michelangelo, which imagined a bitter encounter between the two then elder sculptors, was written in 1911 before Ball arrived in Zurich to later co-found Cabaret Voltaire and Dadaism only steps away from Marktgasse. Unlike most of the buildings in Niederdorf, Marktgasse 4 and 6 haven't been renovated of late; the marks of recent encounters are written into their features too. And the works exhibited are undoubtedly affected by their surroundings. It's easy to feel reverence for the past when it is presented so personally and intriguingly; and perhaps nostalgia clouds our view in regarding these contemporary works that deserve a critical eye. There's a troublesome temptation to fall into the habits of dealing with historic objects: do I try to categorize, running the risk of being reductive and ill-informed; or do I enjoy this series of curiosities, thus dismissing the experience as exotic entertainment? During my visit I was told several times that I was going the Wrong Way; as the exhibition continues, one hopes that the gallery will embrace such erring off the prescribed path. There's drama aplenty in Marktgasse: spotting the gaps and coming back to reality now and then can be to the advantage of the works and the gallery moonlighting here.