In 1960, he was called to St. James Church, Los Angeles, where his progressive view of race relations created serious tension with members of his congregation.
He soon resigned St. James and moved back to New York, where, until he was elected Bishop Suffragan of Dallas in 1974 (consecrated in 1975), he served as a parish priest and a much-respected theologian and Christian intellectual.
Terwilliger's objective was to get Episcopalians together in a great city in order to form friendships while gaining exposure to the best religious voices in the world.
The idea for the institute was hatched at a French restaurant on the Lower East Side, when A.M. Allchin of Pusey House, Oxford, and Terwilliger were having dinner.
His reasons for opposition were strictly theological and deeply conditioned by his commitment to the reunion of Christians, especially Anglicans and Eastern Orthodox.