Settlement Music School was founded in 1908 by Jeanette Selig Frank and Blanche Wolf Kohn as the music program of the College Settlement in the Southwark section of Philadelphia. The College Settlement was a typical turn-of-the-century settlement house offering a variety of services to the newly arrived immigrants in the community. The music program grew rapidly from volunteers offering piano lessons for a nickel to a full program of instruction in all musical instruments taught by professionals, including several members of the Philadelphia Orchestra. By 1914, Settlement was incorporated as an independent community school of the arts. The current Mary Louise Curtis Branch building was built to house Settlement in 1917.

Although founded primarily for the benefit of school-aged children, Settlement developed a conservatory division offering pre-professional training that was of sufficient stature to serve as the nucleus of the Curtis Institute of Music, established in 1924.

In the 1940's and '50's, Settlement experimented with various remote satellite and branch locations, and by 1960 had established Germantown and Northeast (later the Kardon-Northeast) branches.

In the 1970's, Settlement undertook an ambitious program of education and therapy in music and dance for disabled children and adults, and in the mid-1980's incorporated the Kardon Institute of the Arts for People With Disabilities as a separate but allied institution. In 1985, the Kardon Institute formed its own independent 501(c)3 organization. In 2002, Settlement contracted with the Institute to manage and provide a program of instruction and therapy for people with disabilities in Settlement's branch locations. In 2014, the Kardon Institute closed and its programs and many of its therapists transitioned to Settlement.  In July of 2014, Settlement officially launched the Kardon Center for Arts Therapy, offering music, art, and dance/movement therapy services to individuals with various special needs at each of Settlement's community branches and at other locations throughout the communities we serve.

In the late '80's Settlement merged with the Jenkintown Music School to create a fourth branch and founded a fifth branch in West Philadelphia (now the Wynnefield Branch) as well.

In January of 1997, Settlement began a collaborative relationship with the Camden School of Musical Arts in East Camden whereby Settlement provided the Camden School with management and technical assistance. In 2002, The Camden School amended their articles of incorporation to become the sixth full branch of Settlement in 2005. In 2015, Settlement forged a partnership with Creative Arts Morgan Village Academy (CAMVA) and officially moved the Camden Branch to CAMVA's building on Morgan Boulevard.

In the Fall of 2010, Settlement began building a new branch in Willow Grove, and in January, 2011, the Willow Grove Branch replaced the leased facility in Jenkintown.