In 1780 an act of the Virginia General Assembly granted 8,000 acres of land for the establishment of a "public school or Seminary of Learning." Three years later another act added an additional 12,000 acres, and named the school Transylvania Seminary. The first meeting of the board of trustees met in Danville on November 10, 1783, at Crow's Station. Rev. David Rice was elected chair; others in attendence included Samuel McDowell, Willis Green, and Walker Daniel. The Revolutionary War, Indian conflicts, and unstable frontier conditions made the establishment of the new school difficult, but nevertheless, the trustees resolved to open a grammar school in the cabin of David Rice near Danville. The first classes began in February 1795, but the seminary lasted barely a year. The trustees decided in 1788 to move the school to the rapidly growing community of Lexington. In 1793 a group of citizens purchased a lot, built a brick house on it, and offered both to the seminary if the trustees would locate permanently in Lexington, which they agreed to do.
Strongly supported by Kentucky Presbyterians, but founded as a public, state-supported institution, the seminary's early years were racked by controversies. By 1794 Presbyterians felt they had lost control of the board of trustees, and therefore the school, and founded the Kentucky Academy near Pisgah. In 1798 an act of the Kentucky General Assembly united the two rival institutions under conditions favorable to the Presbyterians. The new school opened as Transylvania University in January 1799. The turmoil continued, however. By 1818 Presbyterians again felt their control slipping. The election of Rev. Horace Holly, a Unitarian, as president of Transylvania University deepened the Presbyterians resolve to establish their own school. They once more petitioned the state legislature, and in 1819 the General Assembly chartered Centre College.