Between 1954 and 1957, Josiah Kirby Lilly, Jr. donated his collection of rare books and manuscripts – widely considered to be one of the finest private libraries in the world - to Indiana University. As he had envisioned, these 20,000 printed books and 17,000 manuscripts had a transformative effect on the intellectual life of the University, and in turn, the state of Indiana. President Herman B Wells immediately recognized the collection's profound significance and determined a freestanding library was required to not only care for the materials, but to establish and proclaim IU's esteemed position as caretakers and curators of the state's most valuable literary legacy.

Named "The Lilly Library," in honor of the Lilly family, the limestone structure was placed at the heart a growing campus, to serve, along with the School of Fine Arts; the University's Art Museum, and the Indiana University Auditorium, as the University's "Fine Arts Plaza" -- Indiana's center for the arts and humanities, available to all.