CEU was founded in 1991 by hedge fund manager, political activist, and billionaire philanthropist George Soros, who provided it with a $250 million endowment in 2001,[5] making the university one of the wealthiest in Europe, especially on a per-student basis.

The minutes of the gathering held in April 1989 record a discussion among scholars such as Rudolf Andorka [hr], Hanák Péter [hr], Márton Tardos, István Teplán, Miklós Vámos and Miklós Vásárhelyi from Budapest, William Newton-Smith and Kathleen Wilkes from Oxford, Jan Havranek, Michal Illner and Jiří Kořalka from Prague, and Krzysztof Michalski and Włodzimierz Siwiński from Warsaw.

[15] In 1989–90, a serious attempt was undertaken to establish Central European University in the Slovak capital of Bratislava, but it fell through due to nationalist politicians' opposition.

[10] It was originally located mostly in Prague, but because of "political and financial conflict between its founder and [the] Czech government",[17] represented by then prime minister Vaclav Klaus, in January 1993 it was moved to Budapest.

It has since developed a distinct academic approach, combining regional studies with an international perspective, emphasizing comparative and interdisciplinary research in order to generate new scholarship and policy initiatives, and to promote good governance and the rule of law.

[20] Leon Botstein (president of Bard College, New York), who had previously served as the vice-chair of the board, was elected as new chairman for a two-year term.

"[26] On 31 March 2017, Hungarian PM Viktor Orbán stated in an interview on public radio that the future of "Soros University" depended on US-Hungarian talks.

[30] Hungarian EU Commissioner for Education, Culture, Multilingualism and Youth Tibor Navracsics, and former President of Hungary László Sólyom also expressed support.

British author Tibor Fischer expressed his support for the legislation passed on the initiative of Prime Minister Viktor Orbán's government, which affects CEU as well as all other Hungarian universities.

"[41] According to The New York Times, "Mr. Orban has long viewed the school as a bastion of liberalism, presenting a threat to his vision of creating an 'illiberal democracy,' and his desire to shut it down was only deepened by its association with Mr. Soros, a philanthropist who was born in Hungary.

[He] has spent years demonizing Mr. Soros, a Jew who survived the Nazi occupation of Hungary, accusing him of seeking to destroy European civilization by promoting illegal immigration, and often tapping into anti-Semitic tropes.

"[42] Vox wrote that CEU "was a casualty of Prime Minister Viktor Orbán's turn toward authoritarianism, his development of a quietly repressive system that I've termed 'soft fascism'.

CEU, a university dedicated to liberal principles and founded by Hungarian-American billionaire George Soros, posed a threat to Orbán's ideological project.

So Orbán put into place a set of characteristically sneaky regulations aimed at forcing out CEU without needing to formally ban them, eventually crushing the university's ability to operate.

"[43] The Washington Post commented that CEU "has become the prime target of Orban's campaign to dismantle Europe's multicultural, tolerant liberalism and cement a culture that is unapologetically Christian, conservative, and nationalist.

"[44] On 3 December 2018 the university announced it would relocate the majority of its operations to Vienna in September 2019, after the Hungarian government's refusal to sign an agreement allowing it to continue teaching its US-accredited programs in Hungary.

[47] This withdrawal is the result of a long legal battle between the university and Viktor Orbán's government, and is set in the wider context of contemporary Hungarian politics.

The statement clarified that the university has processes in place to ensure that its students can report any incidents of antisemitism as well as all other forms of ethnic or religious hate speech, which are dealt with by its internal mechanisms within the parameters set out by CEU's Code of Ethics.

CEU’s founding mission in defence of open societies enjoins it to protect critical discussion, and the freedom to scrutinize competing ideas.

[58] As of 2024, the university is composed of 13 academic departments and 17 research centers, in addition to the Doctoral School of Political Science, Public Policy and International Relations.

[66][67] Regardless of this limitation due to the intentionally small size and specialised nature of the university, CEU has consistently performed well in subject rankings produced by various publishers.

The Blinken Open Society Archives (OSA) at CEU is a Cold War research facility, holding over 7,500 linear meters of material, 11,000 hours of audiovisual recordings and 12 terabytes of data related to communist-era political, social, economic and cultural life.

[79] Among the university's alumni in law and government are the former President of Georgia, Giorgi Margvelashvili[80] as well as the first Romani woman Members of the European Parliament Lívia Járóka[81] and Monica Macovei, former Georgian Minister of Defense Tinatin Khidasheli, chairman of the Slovakian Party of the Hungarian Coalition József Berényi, Azerbaijani opposition politician Ilgar Mammadov, and former Croatian Minister of Justice Orsat Miljenic.

Jaroslav Miller, professor of history and rector at Palacký University,[83] Előd Takáts professor and rector at Corvinus University of Budapest, political scientist Tomasz Kamusella, historian of religions Andrei Oișteanu, vice-president of the Polish Academy of the Sciences Paweł Rowiński,[84][85] and Serbian political scientist Srđan Cvijić[86] are alumni.

The university also has alumni in the fields of art and activism, including Azerbaijani dissident Rashadat Akhundov and filmmaker Dylan Mohan Gray.