The Ajayi Crowther University, Oyo was established by the Supra Diocesan Board (West) of the Church of Nigeria (Anglican Communion), and has its origin in the defunct CMS Training Institution, Abeokuta and the defunct St. Andrews College, Oyo. The University started as CMS Training Institution in Abeokuta in 1853 from where it was relocated to Lagos from 1868 to 1896. In March 1896, it was transplanted to Oyo and acquired the name St. Andres College, Oyo retrospectively in 1920.

In 1977 Government took over the control and administration of all schools in the Federation and with this development the Church of Nigeria was divested of her proprietorship of the college. However, the St. Andrews College Old Boys Association (SACOBA) interest and by extension that of the Church, in the growth and development of St. Andrews did not wane. Thus, in response to SACOBA's petition, the erstwhile Oyo State Government upgraded the Institution to NCE campus in 1980 and to the full fledged College of Education in 1985.

The dream of all Andrians (products of St. Andrews College) and their well wishers as well as the Church of Nigeria (Anglican Communion) was that St. Andrews College, Oyo should ultimately be transformed into a full-fledged University, given her success story and her pioneering role as the Precursor of Tertiary Education in Nigeria. the final step towards fulfilling this dream was taken on 7 September, 1999 when the Church of Nigeria granted SACOBA's request for the establishment of Ajayi Crowther University, Oyo at the site of the former St. Andrews College, Oyo under the proprietorship of the Church. Having satisfied the rigorous criteria prescribed by the National Universities Commision (NUC) for the establishment of Universities in Nigeria, Ajayi Crowther University (ACU) was granted license to operate as a private University in Nigeria on 7 January 2005.