The foundation of Northwestern University can be traced to a meeting on May 31, 1850, of nine prominent Chicago businessmen, Methodist leaders, and attorneys who had formed the idea of establishing a university to serve what had been known from 1787 to 1803 as the Northwest Territory. On January 28, 1851, the Illinois General Assembly granted a charter to the Trustees of the North-Western University, making it the first chartered university in Illinois. The school's nine founders, all of whom were Methodists (three of them ministers), knelt in prayer and worship before launching their first organizational meeting.[25] Although they affiliated the university with the Methodist Episcopal Church, they favored a non-sectarian admissions policy, believing that Northwestern should serve all people in the newly developing territory by bettering the economy in Evanston.

University Hall (1869), the second building constructed on campus, and the oldest building still standing
John Evans, for whom Evanston is named, bought 379 acres (153 ha) of land along Lake Michigan in 1853, and Philo Judson developed plans for what would become the city of Evanston, Illinois. The first building, Old College, opened on November 5, 1855. To raise funds for its construction, Northwestern sold $100 "perpetual scholarships" entitling the purchaser and his heirs to free tuition. Another building, University Hall, was built in 1869 of the same Joliet limestone as the Chicago Water Tower, also built-in 1869, one of the few buildings in the heart of Chicago to survive the Great Chicago Fire of 1871.

In 1873 the Evanston College for Ladies merged with Northwestern, and Frances Willard, who later gained fame as a suffragette and as one of the founders of the Woman's Christian Temperance Union (WCTU), became the school's first dean of women (Willard Residential College, built-in 1938, honors her name). Northwestern admitted its first female students in 1869, and the first woman was graduated in 1874. Northwestern fielded its first intercollegiate football team in 1882, later becoming a founding member of the Big Ten Conference. In the 1870s and 1880s, Northwestern affiliated itself with already existing schools of law, medicine, and dentistry in Chicago. Northwestern University Pritzker School of Law is the oldest law school in Chicago. As the university's enrollments grew, these professional schools were integrated with the undergraduate college in Evanston; the result was a modern research university combining professional, graduate, and undergraduate programs, which gave equal weight to teaching and research.