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In August 1877, Amanda McFarland, a Presbyterian missionary, arrived at Wrangell to open a mission and school. In 1878, it became a girls' school and home that operated at least until 1889.

The Organic Act, passed by Congress in 1884, directed the Secretary of the Interior to provide education for children in Alaska without regard to race. The provision was unusual for the time. Additionally, Congress authorized $25,000 for education in Alaska. The secretary chose to appoint a general agent to oversee the opening and operation of schools around the district. Sheldon Jackson, a Presbyterian leader who was interested in Alaska, was appointed to the position and served until 1908.

At Sitka, a Presbyterian mission school opened by John G. Brady in 1878 in an old army barracks became the Sitka Industrial Training School around 1884. It offered training in carpentry, machine work, and carving. The boys also were assigned chores around the school. Later, the school offered a program for girls. Their courses included sewing, mending, cooking, washing and ironing, and cleaning. As late as 1905, the Sitka school, the Roman Catholic mission school at Holy Cross, and a school at the Tsimshian reserve at Metlakatla, were the only vocational training schools available to Alaska Natives.

Funding for Alaska's education system involved federal, territorial, and local governments. The federal government contributed 25 per cent of the license fees that were paid into the Alaska Fund. Revenue from the sale of timber from Alaska's national forests was for education and roads. The territory contributed a portion of the funds it collected from fisheries, cold storage plants, and license fees. Additionally, every male resident between the ages of 21 and 40 was assessed five dollars annually for school support. Local governments contributed funds they collected from license fees and real and personal property taxes.

By 1912, incorporated towns supported schools for non-Natives, the Bureau of Education operated schools for non-Natives who lived outside of incorporated towns and for Natives, and a number of missionary groups continued to operate boarding and day schools for Natives.

In 1972, Alaska Legal Services sued the State of Alaska on behalf of Molly Hootch. Molly, a high school student from the Western Alaska village of Emmonak, attended school in Anchorage. The suit charged that boarding schools and correspondence courses did not provide the same educational opportunities as attending high school in the student's hole community. In 1976, the State of Alaska agreed with Alaska Legal Services that villages that had an elementary school should have high schools. The State of Alaska immediately began a $143 million program to construct schools in compliance with the consent decree.

In 1935, the institution became the University of Alaska. Residents were not charged tuition and non-residents paid $20 per semester.