Universiti Sains Malaysia was founded after an agreement made on a resolution approved by the Penang State Legislative Council in 1962, which suggested that a university college be established in the state. An area in Sungai Ara was identified and later the foundation stone was placed by the then Prime Minister, Y.T.M Tunku Abdul Rahman Putra Al-Haj on the 7th of August 1967. In 1969, the University of Penang was established in response to the need for a larger campus with a more conducive environment, appropriate to the needs of the future of the country.

Since the beginning, USM has implemented a school system, as opposed to the traditional faculty system. What is unique about this system is that each school could fulfill the needs of a more focused degree in the chosen area of study and at the same time, students could have the opportunity to explore other areas of study offered by other schools. The interdisciplinary approach ensures that USM, the first in the country to adopt this system, would produce trained, multi-skilled graduates.