[3] After a brief period as the Annenberg Research Institute (1986–1993), Dropsie ceased to be an independent organization and became part of the University of Pennsylvania.

In December 1983, the school moved to Temple Adath Israel of the Main Line in Merion where it was welcomed rent-free.

The faculty at Dropsie included scholars from outside the United States, including Benzion Netanyahu, who came from Jerusalem with his young sons, Yonatan (Yoni) and Benjamin (Bibi), who there had their first true exposures to American culture, which would become a touchstone for later interactions with the American public for Bibi.

On November 9, 1981, newly elected president David M. Goldenberg was notified of an arson attack, taking place on the forty-third anniversary of Kristallnacht.

Attempts to put out the fire irreparably damaged the library and its contents, including rare books and ancient cuneiform tablets.

[8]: 199–201 Goldenberg launched an extensive campaign to recover and restore the library, while board member Albert J.

Wood became the founding chairman of the board of the briefly renamed Moses Aaron Dropsie Research Institute, followed by Walter Annenberg as of September 13, 1985.

The proposed goal of the new institution was to support dialogue among the monotheistic faiths of Judaism, Christianity and Islam.