Classes began 1 November 1941, with four instructors and 60 students in an abandoned airplane hangar at Crissy Field known as Building 640.

Gen. Joseph Stilwell and Gen. George Marshall studied Chinese as officers stationed in China and understood the need to provide language training for enlisted troops, establishing a language program in 1924 to teach U.S. soldiers and officers in Asia the rudiments of spoken Chinese.

[7][8] During the war, the Military Intelligence Service Language School (MISLS), as it came to be called, grew dramatically.

After the attack on Pearl Harbor Japanese-Americans on the West Coast and the Hawaii Territory were moved into internment camps in 1942.

Nisei Hall, along with several other buildings, is named to recognize those WWII students honored in the institute's Yankee Samurai exhibit.

While regular language training continued unabated, more than 20,000 service personnel studied Vietnamese through the DLI's programs, many taking a special eight-week military adviser "survival" course.

[11] In the spring of 1993, the Base Realignment and Closure (BRAC) Commission rejected suggestions that the institute be moved or closed, and recommended that its mission be continued at the present location.

Supporters of the closure believed that due to the rising property values and cost of living in the Monterey Bay area, taxpayers would save money by moving both schools to a less expensive location in Ohio.

Opponents argued that it would be difficult (if not impossible) to replace the experienced native-speaking faculty at DLI, as the cultural centers of San Francisco and California's Central Coast offer a more diverse pool from which to recruit local instructors, and that the military intelligence community would suffer as a result.

International students must be sponsored by an agency of the Department of Defense, and commonly include personnel from NATO member countries.

Military service members study foreign languages at highly accelerated paces in courses ranging from 24 to 64 weeks in length.

[12] In October 2001, the Institute received Federal degree-granting authority to issue Associate of Arts in Foreign Language degrees to qualified graduates of all basic programs.

As of 2022, DLIFLC also offers bachelor's degrees to graduates of DLI accredited Intermediate and Advanced courses.

[13] Although the property is under the jurisdiction of the United States Army, there are U.S. Navy, U.S. Marine Corps, and U.S. Air Force presences on post, and all four branches provide students and instructors.

As of 2015, a number of languages are taught at the DLIFLC including Afrikaans in Washington, DC and the following in Monterey: Modern Standard Arabic, Chinese (Mandarin), French, Indonesian, Japanese, Korean, Russian, Spanish.

There is some overlap, however, as students from the Defense Attaché System (DAS) are given local training in languages also available at the Monterey location.