Construction of the station, initially named Ma Liu Shui after the locality in which it is situated, began in January 1955.

Nobody was injured, but the derailment led to thousands being stranded at University, Tai Po Market, and Fo Tan stations, leading to an "almost hysterical scramble for road transport".

Together, the accidents caused a "great stoppage" in Kowloon and the eastern New Territories, leading to anger and fights at massive queues for taxi ranks and bus stations.

In the early 1990s, the new town of Ma On Shan was developed on the other side of Tolo Harbour, and it seemed inefficient to make residents there go all the way to Sha Tin to catch a train.

Therefore, university station was expanded at a cost of $72.4 million, becoming an important interchange between buses and minibuses from Ma On Shan and the East Rail line.

[9] Construction began in late 1998 and the expanded station, designed by Leigh & Orange, was officially opened in October 2000.

[10] The entrance is unusual on the MTR system in that it opens directly onto a platform rather than a concourse level, meaning that it is convenient only for those using northbound trains because there is no way to cross the tracks at that area.