After the Peace Treaty of Moudros had been signed (17/30 October 1918), Greece was assigned by the allies to control of the Smyrna area in order to maintain stability and peace in the wider area. In the socio-political context, Professor Constantine Caratheodory — being a Professor at University of Berlin at the time — proposed the establishment of a new University. While Greece was negotiating the normalisation of its authority over the "Smyrna zone", the internationally known mathematician turned in a "plan for the creation of a new University in Greece", named "Ionian University" on 20 October 1919. While Greece was extending its borders, Hellenism stood as a mediator between the Slavic and Turkish-Arabic world and the Western world.

Caratheodory argued that Athens, being the only educational centre in the area at the time, could not deal adequately with the growing needs of the eastern part of the country. He proposed three possible administration centres for the new university: Smyrna, Thessaloniki and Chios. The Government decided upon establishing the Ionian University, based in Smyrna, Asia Minor (in today's city of Ismir, Turkey) on 1 December 1920. Constantine Caratheodory undertook the task of co-ordinating the initial efforts.

The first plans included the establishment of Schools which would promote the development of the area as a key spot for the overseas Hellenism, while, when it was almost ready to operate, the University was considered just as good as other well-known European Universities. However, the Ionian University never opened its doors to students due to the Asia Minor Disaster in 1922.

The University of the Aegean is the continuity of Constantine Caratheodory's initial vision. Re-established in 1984, it is one of the newest Universities in Greece. Today, 21 years later, the University has 17 departments and has become one of the largest Universities in the country.

The central administration of the University is located in Mytilene (the capital of the island of Lesvos), while various departments have been established in Chios, Karlovassi (on the island of Samos), Rhodes, Syros and Mytilene. Because the University is set up on different islands, it constitutes a University-network covering all prefectures of the Aegean Sea.

One of the principal features of the Departments of the University of the Aegean is that they develop new scientific domains, usually interdisciplinary, which adhere both to the needs of the contemporary Greek society and global community as well as to students' requirements and expectations for high-quality studies combined with excellent career prospects.

The University of the Aegean has been developing slowly but steadily and surely, according to the Stategic Plans and the Five-Year Development Plans. In these plans the experiences gained both from the operation of academic departments on border islands and the communication within a University-Network are incorporated. These experiences have led the University of the Aegean to be the first Greek University that has fully been utilising Information and Communication Technologies (ICT)into its everyday activities, and thus implementing the Information Society in Greek higher education.