The school began in 1968 with a group of Birmingham arts community leaders, James Hatcher and Peggy Beddow Cook, who acquired funding from Governor Lurleen Wallace to support instructional programs based in community arts agencies after school.

At this time the private, non-profit Alabama School of Fine Arts Foundation was established to raise funding to build an all-new campus complex.

The ASFA Foundation began a new capital campaign in 2006 to raise money for the construction of a new theatre complex.

The new 500-seat theater, named in honor of Dorothy Jemison Day, was opened on March 30, 2012, with an ASFA theatre department production of Thornton Wilder's Our Town.

Prospective students must submit an application with test scores, transcripts, essays, and three letters of recommendation.