University Place received its name in the 1800s when the University of Puget Sound, a private liberal-arts college in North Tacoma, purchased land along the primary north–south route of Grandview Drive. The school sought to build a new campus there, but ended up selling the land back to the city for about $11,000. University Place remained an unincorporated part of Pierce County until the City of University Place was formed on August 31, 1995.

Most of University Place is in the University Place School District, which manages eight public schools. Primary schools teach kindergarten through fourth grade. Intermediate schools teach grades five through seven. Junior high is grades eight and nine. High school students are in grades ten through twelve.

Today, University Place is largely suburban in character and functions as a mixed business and residential area with waterfront on the Puget Sound. The town is home to Curtis Senior High School and Charles Wright Academy.

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