In Indianapolis, Ovid established a law firm with partners Calvin Fletcher, Simon Yanders and future Indianapolis mayor, Horatio C. Newcomb. Butler became interested and active in political and social issues. In 1849, Butler established the political and abolitionist newspaper Free Soil Banner. Due to bad health, Butler gave up his law practice in 1849 seeking retirement.
As a member of the Christian Church (Disciples of Christ), Butler sought to establish a university for that Christian movement. On January 15, 1850, the Indiana General Assembly approved the university. On November 1, 1855, the North Western Christian University opened. Ovid Butler served as the head of the Board of Directors until 1871. He became Chancellor of the University and, in 1877, the school became Butler University. Butler is also the namesake of the Ovid Butler Society, a recognition society for Butler University's most generous donors.