The University grew out of the work of Sir Syed Ahmad Khan who in the aftermath of the Indian Rebellion of 1857 felt that it was important for Muslims to gain modern education and become involved in the public life and Government Services in India at that time. Raja Jai Kishan helped Sir Syed a lot in establishing this university. The British decision to replace the use of the knowledge of Persian in the 1830s for Government employment and as the language of Courts of Law caused deep anxiety among Muslims of the sub-continent. Sir Syed then clearly foresaw the imperative need for the Muslims to acquire proficiency in the English language and "Western Sciences" if the community were to maintain its social and political clout, particularly in Northern India. He began to prepare the road map for the formation of a Muslim University by starting various schools. In 1864, the Scientific Society of Aligarh was set up to disseminate Western works into native languages as a prelude to prepare the community to accept "Western Education". Sir Sultan Mahommed Shah, The Aga Khan III has contributed greatly to Aligarh Muslim University in terms collecting funds and providing financial support.
In 1875, Sir Syed founded the Muhammadan Anglo Oriental College in Aligarh and patterned the college after Oxford and Cambridge universities that he had visited on a trip to England. His objective was to build a college in tune with the British education system but without compromising its Islamic values.
It was one of the first purely residential educational institution set up either by the Government or the public in India. Over the years it gave rise to a new educated class of Muslims who were active in the political system of the British Raj, and who would serve as a catalyst for change among not only the Muslim population of India, but of the entire subcontinent. When Viceroy to India, Lord Curzon visited the College in 1901, he praised the work which was carried on by the College and called it of "sovereign importance"
The college was originally affiliated with the University of Calcutta, and was transferred to the Allahabad University in 1885. Near the turn of the century it began publishing its own magazine, and established a law school. It was also around this time that a movement began to have it develop into a university to stand on its own. To achieve this goal, many expansions were made with more and more programs added to the curriculum. A school for girls was established in 1907. By 1921(exact year 1920), the College was transformed into a university, and it was named Muslim University. Its growth continued. The first chancellor of the university was a female, Sultan Shah Jahan Begum. In 1927, a school for the blind was established, and the following year, a Medical School was attached to the university. By the end of the 1930s, the University had also developed its Engineering faculty.