Liao Zhong (了中; Pe̍h-ōe-jī: Liáu-tiong) and named for the Tang dynasty monk Xuanzang, the school was promoted to university status in 1993.

The "rump" project was led by Liao Zhong, a monk and BAROC official who would ultimately chair Hsuan Chuang's board of directors.

Hsinchu was chosen as the school's location for its proximity to the Buddhist teachers resident in north Taiwan and for its cheap land prices relative to Taipei.

Underlying this development is demographic pressure resulting from a dearth of university-age young people and a corresponding glut of colleges and universities (many of very marginal quality).

The school finally opened under the name of Hsuan Chuang College of Humanities and Social Science (玄奘人文社會學院, Xuanzang Renwen Shehui Xueyuan).

As spelled on all school signage, "Hsuan Chuang" follows the Wade-Giles phonetic standard that would equate to Pinyin Xuán Zhuǎng (but not zàng).

There are no religious requirements or restrictions (these would not be allowed by the Ministry of Education) and, except for a handful of monks and nuns, religion does not seem to be an important factor in attracting students.