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In 1871, General William Jackson Palmer, founder of the Denver and Rio Grande Railroad, laid out the city of Colorado Springs along his new line from Denver. Envisioning a model city, he reserved land and contributed funds for a college, which was to open May 6, 1874.

The college's first building, Cutler Hall, was occupied in 1880; the first bachelor's degrees were conferred in 1882. Under President William F. Slocum, who served from 1888 to 1917, the campus took the shape it held until the 1950s. During this time, the college reached scholarly maturity, especially by significantly expanding and improving the library's holdings and by attracting leading scholars in a number of fields. Phi Beta Kappa was chartered in 1904.