Its first director, Kurt Albert Gerlach, who proposed the idea of creating the institute with Weil, died before making his mark, and was swiftly followed by Carl Grünberg, a Marxist historian who gathered together fellow "orthodox" Marxists at the Institute, including his former pupil Henryk Grossman.

Horkheimer rapidly became the guiding spirit of the Frankfurt School, a group of thinkers that was born under his directorship at the Institute.

[2] In 1933, after the rise of Hitler, the Institute left Germany for Geneva and then in 1934 moved to New York City.

In New York it became affiliated with Columbia University, and its journal Zeitschrift für Sozialforschung was renamed Studies in Philosophy and Social Science.

The Institute has been both a research enterprise and, during its Frankfurt periods, a provider of instruction in sociology at the university there.