U.S. Grant University, or Grant University, as it was commonly known, was the institution formed by the consolidation of Chattanooga University with Grant Memorial University (formerly East Tennessee Wesleyan University) in April 1889. In October 1889, the name of the institution was officially changed to U.S. Grant University. Prior to the merger, the schools operated independently of one another; Grant Memorial University was governed by the Holston Conference of the Methodist Episcopal Church while Chattanooga University was governed by the Freedmen's Aid and Southern Education Society and the General Conference of the Methodist Episcopal Church. In order to prevent competition between the two branches, the charter for U.S. Grant University stipulated that Chattanooga would offer a college of liberal arts curriculum and professional programs in law and medicine, while Athens would operate a theology school and develop vocational programs.

After several years of this arrangement, denominational politics within the Methodist Episcopal Church as well as between the two campuses prompted a reorganization in 1892. In that year, the Grant University Board of Trustees amended the charter to transfer the liberal arts college to Athens and in 1893 the board voted to discontinue the academic department at Chattanooga altogether, transferring the school of theology to Chattanooga and leaving Chattanooga to run its loosely affiliated Chattanooga Medical College and law school.

John H. Race, an outsider to the conflict that had damaged both campuses of Grant University, was elected as president of the university in 1897, and in many ways his tenure in that position saved the university. After a short residence in Athens, Race moved his home to Chattanooga and proposed yet another reorganization of campus programming. In 1904, the college of liberal arts reopened in Chattanooga, and in 1907 the charter for the school was revised once again, renaming the Chattanooga campus the University of Chattanooga and the Athens campus the Athens School of the University of Chattanooga. This arrangement held until 1925, when the branch at Athens was made independent and chartered as Tennessee Wesleyan College.