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The original Mustansiriya Madrasah was established in 1227 (or 1232/34 A.D. by some accounts) by the Abbasid Caliph Al-Mustansir and was one of the oldest universities in the world. Its building, on the left bank of the Tigris River, survived the Mongol invasion of 1258 and has been restored.

The modern Mustansiriyah University was established with the help and financial support of the Republic of Ίrāq Teacher’s Union in 1963, mainly providing evening courses. In 1964, the University was given the status of a semi-state institution and some state financial support. At the same time it absorbed Al-Sha’ab University, another private university that had been founded by the Ίrāqi Association of Economists, and then moved to a new campus to the north of the city centre. Initially, the University also managed colleges in Mosul and Basra.

In 1966 a law was passed under which the private universities were converted into public universities. Mustansiriyah thus became, briefly, a College within the University of Baghdad. In 1967 a major reorganisation of higher education was initiated, with the intention that by 1969 all previous institutions would be abolished and reconstituted. Mustansiriyah was designated as a separate University in 1968, and its branch campuses were detached to form part of the University of Mosul and the University of Basra.