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OISE’s proud history dates back to 1906, when the Faculty of Education at the University of Toronto was founded following a Royal Commission report arguing that the "Teaching of education is best performed where the theory and practice can be made to supplement each other." The Faculty established the University of Toronto Schools (UTS) in 1910, to serve as a laboratory to improve the practical and experimental aspects of its program.

In 1926, the St. George's School of Child Study became the first university laboratory preschool in Canada. In 1939, it became the Institute of Child Study (ICS), the first of the University of Toronto's multidisciplinary research centres.

In 1920, the Faculty of Education became the Ontario College of Education (OCE), University of Toronto. During a period of forty-five years, directly funded and controlled by the Ministry of Education, "OCE" was the sole institution in the province preparing secondary school teachers.

In 1965, a special act of the Ontario legislature established the ¥������ (OISE) to offer graduate programs, conduct research and disseminate its findings, and to engage in field development activities in education. In 1966, the departments of Graduate Studies and Research were transferred from OCE to OISE, while teacher education remained at the University of Toronto. Effective July 1, 1972, the College was formally designated the Faculty of Education, University of Toronto (FEUT).

In 1994, the Minister of Education and Training invited the University and OISE to explore the possibility of full integration. On December 16, 1994, the Ministry of Education and Training, the Governing Council of the University of Toronto and OISE signed an agreement outlining the broad terms for the integration of OISE and FEUT, including UTS and ICS with its Laboratory School, into a new professional faculty of education under the Governing Council of the University of Toronto.

The new faculty, named the ¥������ of the university of Toronto, began operations on July 1, 1996.

In 2004, UTS became an independent ancillary corporation within the University of Toronto, with its own Board of Directors. In 2010, in recognition of the Dr. Eric Jackman's gift to the Institute of Child Study (ICS) to support early childhood development and education, the University of Toronto renamed ICS as Dr. Eric Jackman Institute of Child Study.

In 2012, OISE restructured its academic departments from five to four with programs grouped under four distinct yet interrelated areas of scholarship within the broader field of educational studies. OISE's academic departments are:

• Applied Psychology and Human Development (APHD)
• Curriculum, Teaching and Learning (CTL)
• Leadership, Higher and Adult Education (LHAE)
• Social Justice Education (SJE)

In 2014, in response to the Government's decision to substantially reduce the enrolment of students in teacher education programs, decrease perstudent funding, and shift towards a new four-term degree framework, OISE repositioned itself as an all-graduate faculty of education in line with the University of Toronto's differentiated role as Ontario's leading research-intensive university.