The Manhattan School of Music was founded by Janet Daniels Schenck, the philanthropist and pianist.  Prior to World War I, she became a volunteer at the Union Settlement on East 104th Street in Manhattan and developed an interest in the challenges and needs of the immigrant population of the area.  She began organizing other young musicians to teach the neighborhood's residents and, by 1918, she had established an independent music school with 120 students and a faculty of 23.  Cellist Pablo Casals and pianist Harold Bauer joined this enterprise as artist auxiliary board members of the Neighborhood Music School, as MSM was known prior to a name change in 1938.

Dr. Schenck soon financed a new building and concert hall on East 105th Street and, as a result of its academic and artistic growth, the school was granted a charter to offer a Bachelor of Music degree in 1943.  Two subsequent charter amendments authorized the offering of a Master of Music degree and the degree of Doctor of Musical Arts.  A Jazz Studies degree has been offered since 1984.

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In the 1990s, under the leadership of Marta Istomin, former director of the Kennedy Center for the Performing Arts, MSM expanded its facilities adding the first on-campus student housing as well as a new library and more practice, rehearsal and performance spaces. In 2005, when Robert Sirota, an Oberlin graduate, was appointed MSM president after his tenure as Director of the Peabody Institute in Baltimore, he instituted a graduate program in Contemporary Music Performance and the Center for Music Entrepreneurship. 

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MSM is located in the Morningside Heights neighborhood of New York City, and its campus was originally the home of The Institute of Musical Art.  IMA later became Julliard and moved to the Lincoln Center for the Performing Arts in midtown Manhattan.  Notable alumni include Harry Connick, Jr. Catherine Malfitano, Catherine Russell and Dawn Upshaw.