The Blue Gargoyle has a rich and interesting history. The organization was founded in 1968 when a group of divinity students at the University of Chicago approached the leaders of the University Church requesting a place where they could find "community with students, professors and residents of the neighborhood." The students asked if they could operate a coffee house on the church premises. The church agreed and soon university students came for coffee and meat loaf sandwiches provided by church volunteers. In the early 1970's, the Blue Gargoyle expanded its involvement in the community by initiating a number of programs and activities including a crisis intervention hotline.

By 1973, the vitality of the Blue Gargoyle began attracting young African-Americans from the surrounding communities. In response to this interest, the Blue Gargoyle sought and obtained foundation support to hire a social worker to provide programs and activities for the youth. This marked the beginning of the Blue Gargoyle as it is known today.

In 1974, the Blue Gargoyle became an independent non-profit social service agency when it formed its own Board of Directors and filed for 501-(c)3 status with the federal government. Although still operated in the University Church, the Blue Gargoyle is a secular agency serving community residents without regard to religious beliefs or affiliations. Thirty years later, the Blue Gargoyle continues to expand its programs to provide free services to economically disadvantaged residents of Grand Boulevard, Oakland, Washington Park, Woodlawn, Kenwood and Hyde Park.