Just after the French-Prussian war of 1870, only three observatories were officially working in France: those in Paris, Marseilles and Toulouse. They had few facilities and ran in poor conditions. Observational astronomy was quite backward in France, mainly for lack of modern instruments and equipments.

Raphaël Bischoffsheim belonged to one of the most powerful families of Parisian bankers known for philanthropic actions. In 1873, he came into his father's fortune, and decided to carry on the tradition of the family. A friend of him, Maurice Loewy, who was an astronomer at the Paris Observatory convinced him that he could greatly help astronomy.

Bischoffsheim funded the construction of two instruments for the Paris Observatory a meridian circle and an equatorial coudé, then he proposed to provide France with a large modern observatory, equipped with the most powerful telescopes in the world and set up under the most beautiful sky.

It was indeed a new initiative; the private foundations were frequent in the United States and in England, but extremely rare or even non-existent in France.

Bischoffsheim undertook to finance everything, from the purchase of land to the salary of the staffs, including the constructions of the buildings and of the instruments. The Bureau des Longitudes (Board of Longitudes), which had been entrusted since its foundation in 1795, with the supervising French observatories, acted as a scientific advisor.

The star and nebula studies were particularly improving in Germany and in the USA. Bischoffsheim offered an opportunity to create an observatory able to challenge the best.

The Bureau appointed two commissions: one aimed to choose the instruments to be built, and the other to select the site. As soon as 1879, the former ordered to the best French manufacturers of the time, Brunner, Gautier and Eichens, a large meridian circle, a mobile meridian circle, a 38cm-refractor and the huge 76cm-refractor. The Henry brothers, who gained a world reputation afterwards, were entrusted to undertake the optical parts.

After prospecting along the Mediterranean coast from Italy to Spain, the other comittee chose the summit of the Mont Gros, 374 meters above the city of Nice. It overhangs the sea and all the surroundings, it is far enough from the strong winds of the Rhone valley and of the Pyrenees mountains, the sky is often clear, and the atmosphere quiet enough to provide the stability necessary to the observations.