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The institution now known as the Katz Center was founded in 1907 as the Dropsie College of Hebrew and Cognate Learning and finally as Dropsie University. It was named after its benefactor, Moses Aaron Dropsie (1821–1905), a wealthy man whose father was Jewish and mother was Christian but who self-identified as Jewish from the age of 14. Dropsie willed his entire fortune to "the promotion of and instruction in the Hebrew and cognate languages and their respective literatures."
Dropsie granted more than 200 Ph.D.s between its inception and its closing as a degree-granting institution in 1986. Dropsie was also the publisher of the Jewish Quarterly Review, which was at the time the most respected journal on the subject.
The faculty during the Dropsie era included scholars from outside the United States, including Benzion Netanyahu, who came from Jerusalem with his young sons, Yonatan (Yoni) and Benjamin (Bibi), who there had their first true exposures to American culture, which would become a touchstone for later interactions with the American public for Bibi.