Announced in May 2015, the university was introduced as part of a broader initiative aimed at supporting the economic and social development of southern Malta.

[5][10][11] The National Commission for Further and Higher Education (NCFHE) officially accredited the AUM on 30 June 2016, after a 14-month process that included financial and academic evaluations.

[10] Although initial recruitment targets were adjusted, the university aims to establish schools in business, architecture and design, engineering, arts, sciences, and information technology.

The university was originally intended to create a social and economic boost to localities in the South Eastern Region of Malta, which is regarded as being less developed than the rest of the island.

[29] The National Commission for Further and Higher Education (NCFHE) officially accredited the AUM on 30 June 2016, after a 14-month process which included financial and academic evaluations.

[37] The renovation was carried out by Edwin Mintoff Architects between November 2016 and March 2019,[38] and the project included conservation of the existing building, reconstruction of the parts which were destroyed during the war as well as the construction of an intermediate level and additional floors with a contemporary glass-and-steel design.

[14] The project, which was also entrusted to Edwin Mintoff Architects, was to include alterations to the Knights' Building which consisted of the demolition of parts of its interior as well as the construction of an additional floor and a new wing.

[42][46] Opposition to the project was mainly because public open spaces would have been built up, and the proposed extensions would have obstructed views of the Senglea fortifications from Cospicua.

[42] The NGO Flimkien għal Ambjent Aħjar was also opposed to the internal demolition of the Knights' Building, and it stated that the project would have a negative impact on the quality of life of Cottonera residents.

[49] Other critics of the extension included Yana Mintoff[50] and Labour Party MP Glenn Bedingfield; the latter was opposed to the accommodation which would have a swimming pool on the roof.

[51][52] On 26 September 2019, the Planning Authority board announced that it will reject the proposed extension to the university, citing the need to preserve cultural heritage, maintain public open space and ensure the continued view of the fortifications.

[55] Prime Minister Joseph Muscat stated that constructing the university in Marsaskala would pressure the owners of the former Jerma Palace Hotel to redevelop the site, which has fallen into disrepair since being closed down in 2007.

[62] On 20 August, it was announced that the government and Sadeen Group had reached an agreement to split the university between Cospicua and a reduced site at Żonqor Point.

The latter occupy the site of a water polo pitch and 18,000 m2 (190,000 sq ft) of adjoining ODZ fields, and it would consist of three faculties and student dormitories, with a maximum height of five stories.

[67][68] Bartolo confirmed this once again in January 2018,[69] and in the following month AUM President Lewis Walker stated that development at Żonqor would only begin when the university has at least 2,000 students at its Cospicua campus.

[71] As of 2022-23, the American University of Malta is governed by a board of trustees led by Prince Jean of Luxembourg as chairman and Hani Salah as vice-chairman.

[74] Sadeen Education Investment Ltd purchased Bowyer House, a hostel in Tarxien, to be used as the university's official student accommodation in September 2017, and this property is currently being renovated.

[2] One area of criticism concerns AUM’s perceived alignment with American educational standards, as the institution was established by Sadeen Group, a Jordanian company.

Journalist Daphne Caruana Galizia noted that "the man the Jordanian outfit has chosen to be rector of this questionable 'university' is John Ryder, who is the only American aspect of the project.

[78] Philip Altbach, Boston College faculty member and director of the Center for International Higher Education, expressed concern that institutions such as Sadeen-owned AUM are "business interests starting universities to make money using the American brand.

A spokesperson for DePaul University issued a statement, qualifying the legitimacy of AUM's curricula: "Faculty designed degree programs in areas that were requested, with the dual goals of being academically well-designed and meeting regulatory requirements in Malta.

Individual faculty members were selected with the help of teams – composed of associate deans, school directors and department chairs – in the relevant colleges.

[82] Former employees have also voiced concerns over transparency at AUM, with one former staff member describing the university's social media efforts as creating an "idyllic image" that may not fully reflect internal operations.

[83] Another former lecturer mentioned a confidentiality clause that could result in financial penalties for sharing information, which they noted was unusual in both American and Maltese educational contexts.

[85]The Maltese press raised concerns that the National Commission for Further and Higher Education (NCFHE) turned a blind eye to the mass dismissal of faculty in January 2018 in a quid pro quo arrangement with the AUM.

Two former employees of the NCFHE, both directly involved in the AUM's accreditation, were hired as lecturers by the university in August 2019, less than two years after the dismissal of the university's entire faculty: "Manuel Vella Rago was until recently Head of Quality Assurance at NCFHE, while Audrey Abela was its Head of Accreditation, both key roles in the regulation of the AUM.

"[87] During AUM's first two years, Provost John Ryder refrained from releasing official enrolment figures, a decision that drew public interest.

[93] In his role as Chairman of the Cottonera Rehabilitation Committee, Maltese Parliament Member and Labour Party insider Glenn Bedingfield expressed scepticism that the AUM would fulfil its contractual obligation with the Government of Malta to reach the agreed-upon number of students four years after the building phase of the Cospicua campus is completed: "I am beginning to doubt whether they [the AUM] will ever be able to attract the 4,000 students in the promised timeframe [2025 to 2029].

"[94] On the 13 October 2019, the Times of Malta reported that the AUM had only recruited one-fifth of the targeted number of students, 143 of the 710 it had promised the Maltese government.

[95] Board member Taddeo Scerri faced questions regarding potential conflicts between his role at AUM and positions in Malta's financial sector.