Jerry Falwell Sr. was already pastor of Thomas Road Baptist Church when he and Elmer L. Towns founded Lynchburg Baptist College in 1971. Falwell served as the school's first chancellor while running the church and, beginning in 1979, building the Moral Majority into a national political force. The school's name shifted twice — to Liberty Baptist College in 1976, then to Liberty University in 1984. Towns later said the rename was partly to distance the school from associations with the word "lynching" and partly to ride the patriotic enthusiasm of the American Bicentennial. The university has always been explicitly conservative and explicitly evangelical: undergraduates take three required biblical-studies courses, the honor code ("The Liberty Way") prohibits premarital sex, cohabitation, same-sex relationships, and alcohol use, and the curriculum places strong emphasis on young-Earth creationism.

In 1985, Liberty started mailing VHS tapes to distance learners. That homemade beginning eventually became Liberty University Online, the largest single contributor to the university's enrollment, revenue, and political footprint. By the late 2010s, around 80,000 of Liberty's students were taking courses fully online, and the federal financial aid flowing to the university — about $700 million in 2019 alone — made it one of the largest single recipients of federal student-aid dollars in the country. The economic model was unmistakable: enormous online enrollment subsidized a residential campus that added a $3.2 million shooting range in 2018, a synthetic ski slope, an observatory, a hockey program, and FBS-level football. Online instructors mostly grade and answer email rather than create content. Faculty have publicly described the quality gap as steep.

From its founding, Liberty has been openly entangled with Republican politics. Ronald Reagan, George W. Bush, Mitt Romney, John McCain, Donald Trump, Mike Pence, and many others have spoken on campus. In 2004, the School of Government was named for Jesse Helms, the former North Carolina senator and a Falwell family friend. In 2009 the university withdrew official recognition of the campus Young Democrats club. Following Falwell Sr.'s death in 2007, his son Jerry Falwell Jr. became chancellor and steered the school's national profile toward enthusiastic support of Donald Trump — including efforts to censor student journalism critical of Trump, two student editors fired in 2018 reportedly for running such articles, and the school's de facto status as a "pilgrimage site for GOP candidates." In 2020, Falwell Jr. left amid allegations of personal and professional impropriety and was later sued by the university.

Liberty's recent history is complicated. In 2021 a dozen women sued the school, alleging it had failed to address sexual assault and discouraged reporting under the umbrella of the Liberty Way. A 2023 preliminary report by the U.S. Department of Education found that university officials had destroyed documentation, failed to notify the campus of sexual predators, bomb threats, and gas leaks, and otherwise violated the Clery Act. In March 2024 the Department of Education fined the university $14 million — the largest such fine ever imposed — for its treatment of sexual assault survivors and the misclassification of crimes. Dondi Costin became president in 2023. The university's endowment stood at roughly $1.71 billion in 2023. Across the river the Freedom Tower's carillon still rings. The campus continues to grow.