The International Institute began as a branch of the Young Women’s Christian Association (YWCA) early in the 20th century, with a small staff of three, located in a five-room house near downtown Milwaukee. Today, the organization employs nearly 40 employees who assist vital social and educational services.

During the 1920s, the organization expanded as the number of community members seeking services increased. Budget cuts and funding concerns led to the International Institute separating from the YWCA in 1936 and becoming incorporated under Wisconsin law as a separate social agency. 

In 1943, the Holiday Folk Fair International was held for the first time to celebrate the cultural heritage of the people living in southeastern Wisconsin. The event traditionally showcases music, food, dance, and art to enhance intercultural cooperation.