In December of 1906, a dozen householders of the Washington Square area between 14th Street and Washington Square Park were invited to the West 10th Street home of Cornelius Berrien Mitchell, where he proposed the formation of an association in order "to maintain the present desirable character of the neighborhood." The "character" of Washington Square had been established at the Square's initial development in the 1830s as the "American Ward (Ninth ward), a liberal model of cleanliness, good citizenship, and self-respect." In the 1870s, in response to the influx of a large population of Irish to the east and to the west of the Square, as well as a sizable African-American settlement nearby, the old-line patricians politically allied themselves with the Tammany machine. By the next decade the Irish and African-Americans had been pushed out of Greenwich Village, not by right-wing efforts but by a new wave of Italian immigrants. Along with the influence of changing population trends, other psychological factors contributed toward the propensity of the long-standing residents for conservatism; the Square had lost its preeminence as the most fashionable address in New York City. By the 1890s, the "Old Row" houses on Washington Square North looked outdated as "the leaders of fashion had moved uptown, abandoning the lower (Fifth) Avenue to...a few old families [which] hung on" and shops, apartments, and hotels.

The genteel atmosphere around the brick and marble townhouses was threatened by commercial incursions. New and imposing loft buildings filled with immigrant workers appeared, accompanied by the numerous pushcarts which served the adjacent tenement population. Articles emerged in the press concerning the disturbing increase of tramps and immigrants loitering in the park. The long-time residents felt beleaguered on many fronts. A neighborhood association that would act as liaison between the residents, the city authorities and private companies was established in a novel attempt to restrict the noise, pollution, and bustle of mercantilism. The founders of the Association felt that their mission, which they touted as public-spirited, was doubly patriotic: first, as an enterprise which involved individuals in the process of civic participation; and second, as championing preservation of the "old" Washington Square neighborhood. An early test of the system occurred in 1909, when the municipal government took up the role of unwanted developer in an attempt to build a courthouse in the venerable Washington Square Park and was successfully repulsed by the Association.

In response to complaints by the Washington Square Association and millions of other beleaguered Manhattanites against uncontrolled real estate development, the city administration appointed a Zoning Commission (1914) to determine present and future land use. The Association effectively petitioned that a large part of their district remain residential. The fruits of the Washington Square Association's victory can still be seen today on the side streets off Fifth Avenue which retain more residences below 14th Street than above it. The early Board and Members of the Association were long-time residents of the area and many were from old, influential families (such as the Delanos, Rhinelanders, Wanamakers, Van Rensselaers, Schermerhorns, even that of the Mayor of New York, George B. McClelland). Their demand of an aesthetic for their community, as well as their political clout, is evident in initial plans which permitted sidewalk cafes and established tree-planting programs.

This combination of cold politics and warm neighborliness characterize the Association through seven decades of community service. Several Greenwich Village traditions have been established over the years, such as the Washington Square Christmas Celebration, which was initiated in 1924 by the Association in cooperation with the Department of Parks, and featured a tree-lighting ceremony and a carol sing-a-long. In 1920 the Association funded and erected the Memorial Flagpole in Washington Square Park, dedicated to the local heroes of World War I. All civic problems, from trash collection to police protection, contribute to the quality of life on the Square and repeatedly appear on the Association's agenda. A programmatic sampling, by decade, can serve to show the varied, far-ranging projects undertaken by the Washington Square Association. In 1932 Depression-era artists are given an outdoor gallery around the park through the efforts of Mrs. Gertrude Vanderbilt Whitney. The Outdoor Art Exhibit continues to the present as a semi-annual event. In 1949 the "Save Washington Square Committee" is formed and protests the destruction of south Washington Square for the New York University's Law Center. In 1958, although the attempt to preserve the Rhinelander Houses (northwest corner of the Square) fails, the developers modify the new apartment building constructed there to conform with the design of the remaining historic row houses, and community awareness grows toward support of landmark preservation legislation. In 1963, almost a century after Boss Tweed opened a roadway through Washington Square Park, the Association finally forces the city to close the Park to all vehicle traffic. In 1976 the Association is fundamental in organizing the U.S. Bicentennial festivities for Washington Square. The Washington Square Association was the first neighborhood organization of its kind in New York City and has served since its inception as a paradigm for many other community alliances.