On January 15, 1850, the Indiana General Assembly adopted Ovid Butler's proposed charter for a new Christian university in Indianapolis. After five years in development, the school opened on November 1, 1855, as North-Western Christian University at 13th Street and College Avenue on Indianapolis's near northside at the eastern edge of the present-day Old Northside Historic District. Attorney and university founder Ovid Butler provided the property. The university was founded by members of the Christian Church (Disciples of Christ), although it was never controlled by that church. The university's charter called for "a non-sectarian institution free from the taint of slavery, offering instruction in every branch of liberal and professional education". The university was the second in Indiana and the third in the United States to admit both men and women.

The university established the first professorship in English literature and the first Department of English in the state of Indiana. In 1869, Ovid Butler endowed the Demia Butler Chair of English Literature in honor of his daughter, who was the first woman to graduate from the Classical course at the university and had died in 1867. The chair was the first endowed position at an American university designated for a female professor. Catharine Merrill, was the first to occupy the chair in 1869. Merrill was just the second female university professor in the country. Today the Demia Butler Chair of English Literature is occupied by Susan Neville.