Western Baptist Theological Seminary had its beginnings in 1925 as the Portland Baptist Bible Institute through the efforts of Portland pastor Walter B. Hinson. Within two years, the Institute leadership determined that a seminary would be a more effective way to provide graduate-level theological education in the Northwest. Western Seminary was dedicated on October 4, 1927, with thirty-six full-time students.

Western Seminary's first campus was located at 844 East Salmon Street in Portland. In 1944, the school purchased five acres with a residence and carriage house at the foot of Mount Tabor. Milliken Hall opened in 1952, followed by the Cline-Tunnell Library in 1962, and a classroom building in 1971.

Concerns of growing liberalism among Baptists led to the formation of the Conservative Baptist Association of Oregon in 1949. Western Seminary aligned itself with the association and added "Conservative" to its name. The seminary eventually dropped "Conservative Baptist" from its name in recognition of the many students who come from other denominations and perspectives.

Western Seminary was one of the first schools in America to offer a Doctor of Ministry degree, and its video instruction program serves students in study centers in the United States and other countries. Other degree programs include the Doctor of Missiology, and masters degrees in divinity, theology, biblical and theological studies, specialized ministry, counseling, and intercultural studies. The Women's Center for Ministry provides nondegree opportunities to prepare women in ministry.

The institution's presidents, including Earl D. Radmacher (1965-1989) and Bert Downs (1998-2008) were national leaders in theological education. The seminary’s president in 2011, Randal Roberts, is a Western alumnus and has filled faculty and administrative roles at Western since 1987.

Western Seminary is an independent graduate school drawing students from many different denominations. There are approximately 750 students currently enrolled in classes.