Founded in 1877, Philander Smith College is the result of the first attempt west of the Mississippi River to make education available to freedmen (former African American slaves). The forerunner of the college was Walden Seminary, named in honor of Dr. J.M. Walden, one of the originators and the first corresponding secretary of the Freedmen's Aid Society.

In 1882, Dr. G.W. Gray, president of Little Rock University, the institution for the Arkansas Annual Conference of the United Methodist Church, met Mrs. Adeline Smith, widow of Mr. Philander Smith of Oak Park, Ill., while soliciting funds. The late Philander Smith had been a liberal donor to Asiatic Missions and had developed an interest in the work of the church in the South. In making her gift to Dr. Gray, Mrs. Smith designated $10,500 for Walden Seminary. The trustees accepted the gift and gave it special recognition by changing the name of the struggling Walden Seminary to Philander Smith College. A new site for the school had already been purchased at Eleventh and Izard Streets. The gift made by Mrs. Smith was a significant contribution towards the construction of Budlong Hall, the first brick building on the new site.

Philander Smith College was chartered as a four-year college on March 3, 1883. The first baccalaureate degree was conferred in 1888. The first president, the Rev. Thomas Mason, resigned in 1896. He was succeeded by a member of the faculty of the college, the Rev. James Monroe Cox, professor of ancient languages. Dr. Cox retired from the presidency of the college in 1924, and was succeeded by the Rev. George Collins Taylor, a graduate of the college. Dr. Taylor served as president from 1924 to 1936.