The Mexican Baptist Institute was organized by Paul C. Bell, pastor of the Mexican Baptist Church of Bastrop, in 1926. Bell's interest in education began while he was serving as pastor from 1913 to 1919 in Bastrop. He opened an elementary school for Mexican children there and by 1918 reported that thirty-seven pupils were attending. The Mexican Baptist Institute was founded during his second term (1923–35) as pastor in Bastrop. The school, intended to train Christian ministers, was to serve as a practical laboratory for ministerial students. The institute began with one building and later expanded to include additional structures and a farm to make the school self-supporting. The first building contained classrooms and housed orphans, boarding students, and faculty members. The Mexican church congregation also met there. Bell began construction in 1923, did much of the work himself, and completed the building in 1926. The cornerstone of this building bears the inscription: "The Lord hath heard my supplication."
Bell was personally responsible for the financial development of the school. He made trips and fulfilled speaking engagements to raise money. Funds for teachers' salaries came from the Home Mission Board of the Southern Baptist Convention and from women's missionary groups in widespread churches. Produce from the farm was also a source of income. Two factors, however, made fund-raising difficult. First was the economic crisis through which the United States was passing. Second was the recently organized Cooperative Program of Southern Baptists, begun in 1925, which discouraged any kind of fund-raising, since cooperative giving was to take care of the financial needs of Southern Baptist institutions. Bell secured funding from a number of friends in pastoral, denominational, and educational leadership who gave him both moral and financial support. At times he was forced to use his own salary for operating expenses. By 1936 he closed the orphanage.
During its first years of operation the institute concentrated on providing a basic public school education; religious-education courses were offered as electives. Although the quality of the courses improved, the school's vocational aspects were never realized. Bell developed a traveling evangelist-training seminar in which students, equipment for classes, and preaching materials were taken from town to town. Regular classes for local residents were held during the morning and early afternoon hours, after which students participated in visitation and distribution of tracts, followed by evening services. Many churches were organized as a result of these meetings, and students from the institute graduated to service in the new churches. In May 1941, after Bell accepted an offer from the Home Mission Board to direct Baptist work in Panama, the Mexican Baptist Institute was closed and the students turned to other educational institutions for ministerial training.