The San Antonio Art Institute, located behind the Marion Koogler McNay Art Museum, developed from a series of art classes sponsored by various local organizations. The first class was established in 1925 by Alene Rather, then supervisor of art in the San Antonio public schools. Beginning in the fall of 1927 free weekly classes at the Witte Museum were offered to students selected from each secondary school; muralist and sculptor Xavier González was the first instructor. The program received financial support from the San Antonio public schools until 1933, when the Great Depression forced the schools to cancel funding. Classes continued with the implementation of a nominal tuition fee, and in 1933 adult classes, partially funded by the State Vocational Training Department, were offered in life drawing, etching, creative design, metal work, hand-weaving, and commercial art. During this period the Ruiz House on the museum grounds became a well-known ceramics center under the leadership of Harding Black. In 1939 the San Antonio Art League sponsored a Beaux Arts Ball, the proceeds of which were used to establish the Museum School of Art. Henry Lee McFee, Boyer Gonzales, Jr., and Ruby Dugosh were hired to teach classes in the former Brackenridge Park studio of sculptor John Gutzon Borglum.
When the hardships accompanying America's entry into World War II forced the school to close in 1942, Ellen Quillin, then director of the Witte, persuaded Jesse Marion Koogler McNay to house the school on her estate, Sunset Hills. An aviary was renovated to provide classrooms, offices, storage rooms, and a library, and the school, now under the joint sponsorship of Marion McNay and the San Antonio Art League, reopened as the San Antonio Art Institute on October 15, 1943. McNay recruited distinguished artists such as Étienne Ret, Charles Rosen, and Clare Duer to lead classes, and in 1946 commercial art classes at the Borglum Studio were added for the benefit of World War II veterans. Classes in ceramics, life drawing, and portrait painting were offered at the Witte Museum.
After Mrs. McNay's death in 1950 all classes took place on her estate. The school continued to flourish under the leadership of the San Antonio Art League; the board, led by Mary Kargl; and faculty chairmen Warren Hunter, Michael Frary, Robert Winn, Dan Wingren, and Clay Walker. In 1958 Margaret Flowers funded the construction of a modern ceramics studio, and gifts in the memory of Mary Aubrey Keating substantially expanded the school's library. Alden H. Waitt, a retired major general, was director and chairman of the board for sixteen years; he led the school to independent status, which it achieved by incorporating and forming its own board in 1962. Waitt also encouraged a more professional standing for the school by requiring all instructors to hold at least a master of fine arts degree. The institute's curriculum and enrollment continued to expand during the 1960s and 1970s, thus necessitating a larger facility. The McNay trustees provided land for a new building, and retired Episcopal bishop Everett H. Jones and his wife, Helen, paid for the construction of the new 11,000-square-foot building, which opened for classes in January 1976. A gift from the George and Elizabeth Coates Foundation in 1979 enabled the institute to enlarge and renovate its ceramics studio.
The school's development accelerated in 1980, when the board passed a resolution that the Art Institute should become a college of art. A $1.5 million operating endowment drive was completed the next year, and in 1982 the McNay trustees provided more land, giving the Art Institute a 4½-acre campus. From 1983 to 1986 the school conducted a successful $7.5 million fund-raising campaign. The first part of a new 47,000-square-foot building, designed by leading postmodern architect Charles Moore, was completed in 1988. In the early 1990s the school offered courses in aesthetics, art history, calligraphy, ceramics, collages, design, drawing, painting, printmaking, sculpture, life drawing, and critique. Children's and adult studio art classes were also offered. Faced with financial and addreditation difficulties, the institute filed for bankruptcy and closed in 1992.