Windham was founded in 1951 by Walter F. Hendricks as the Vermont Institute of Special Studies. The school's initial aim was to help foreign students improve their English language skills to enable them to meet the requirements for attending U.S. institutions. In 1954, the institution was renamed Windham College and began offering courses in the liberal arts and sciences, earning accreditation in December, 1967. Eugene Winslow succeeded Hendricks as president in 1964, and served for ten years. Under his tenure the college was relocated to an Edward Durell Stone-designed campus outside the village. The academic campus consisted of five buildings, Humanities, Library, Sciences on one side, Fine Arts and the Student Union across the green, all connected by a colonnade. On the hill above stood the five major dormitories, Aiken, Frost, Hendricks, Stone and Dorm Five, as well as two smaller residences, Chumley and Dorm Two.
Under President Winslow student enrollment grew from 160 to a peak of 935. By 1975, however, the number of students had fallen to 450, perhaps due to the end of the Vietnam War and the decreased demand for student deferments. When it closed in 1978  there were only 254 students.
In 1978, there were more than 75 international students invited from Middle-Eastern countries to help the school sustain its financially troublesome existence, but unfortunately, it was closed unceremoniously (in the middle of the cold Vermont winter) two weeks prior to the Christmas Holidays, and the stranded international students were forced to leave the school premises by the order of local Sherriff, All dormitories were vacated, and padlocked. Most international students lost their tuition money (and their boarding cost) that were paid in advance 4 weeks prior to this incident, and forced to disperse to other parts of the USA, or return in shame back to their countries losing their money, faith and respect for American higher learning institutions. This was truly a dark moment in the history of Windham College that left memories of tearful foreign students engraved in the hearts and minds of their survivors. Most foreign students were guided to another local school that graciously helped them to take shelter during the cold winter for a short period in hopes of absorbing them as new students or for humanitarian reasons. Some students survived this tragedy and now (after 33+ years) able to share this information with you.
Walter Hendricks also founded the still functioning Marlboro College in Marlboro, Vermont, west of Brattleboro, Vermont, as well as Mark Hopkins College whose main (and only) administration and classroom building was in a mansion on route 9 in Brattleboro. Mark Hopkins College was accredited by the State of Vermont and authorized to grant Bachelors degrees and closed in 1977.
John Irving taught at Windham when he wrote his first novel, Setting Free the Bears. Part of Irving's novel Last Night in Twisted River is set around Putney, where a character teaches at Windham. Irving writes in the novel: "Windham College was an architectural eyesore on an otherwise beautiful piece of land."
Pearl S. Buck was a trustee of the college.
Alumni have formed a Facebook group, Windham College Survivors.
- Putney Historical Society, History Timeline