The institution was founded in Zagreb in 1866 as the Yugoslav Academy of Sciences and Arts. The bishop and benefactor Josip Juraj Strossmayer, a prominent advocate of higher education during the 19th century Croatian national romanticism, set up a trust fund for this purpose and in 1860 submitted a large donation to the then viceroy (ban) of Croatia Josip Šokčević for the cause of being able to
bring together the best minds [...] and find a way in which books in the national languages could be produced in the Slavic South; the Academy should also take under its aegis all the areas of human science
After some years of deliberations by the Croatian Parliament and the Emperor Franz Joseph, it was finally sanctioned by law in 1866. The official sponsor was Josip Juraj Strossmayer, while the first Chairman of the Academy was the distinguished Croatian historianFranjo Rački.Đuro Daničić was elected for secretary general of the Academy, where he played a key role in preparing the Academy's Dictionary, "Croatian or Serbian Dictionary of JAZU".
The Academy's creation was the logical extension of the University of Zagreb, the institution initially created in 1669 and also renewed by bishop Strossmayer in 1874. Bishop Strossmayer also initiated the building of the Academy Palace in the Zrinjevac park of Zagreb, and the Palace was completed in 1880. In 1884, the Palace also became a host of The Strossmayer Gallery of Old Masters that contained 256 works of art (mostly paintings). The same is today one of the most prominent art galleries in Zagreb.
The Academy started publishing the academic journal Rad in 1867. In 1882, each of the individual scientific classes of the Academy started printing their own journals. In 1887, the Academy published the first "Ljetopis" as a year book, as well as several other publications in history and ethnology.
The number of full members and corresponding members is limited to 160 each, while the maximum number of associate members is 100. Number of full members per department is limited to 24. Only the full members may carry the title of "academician" (English: F.C.A., Croatian: akademik (male members) or akademkinja (female members)).
^The adjective "Yugoslav" was coined in mid-19th century by the movement that sought national unity of the South Slavs from Austria-Hungary with their eastern neighbors. Its extent was likely ambiguous, e.g. in whether or not it meant to include Bulgarians and Macedonians. Later the term became associated specifically with the country and peoples of Yugoslavia.