Wilson served as the president of Princeton University

It is a fact that Wilson served as the president of Princeton University. Princeton trustees promoted Professor Wilson as president in June 1902, replacing Patton, whom the trustees regarded to be an ineffective administrator. Wilson established academic departments and a system of core requirements to stress the development of competence. Wilson launched an aggressive and successful fundraising campaign to fund these new programs, persuading alumni such as Moses Taylor Pyne and billionaires such as Andrew Carnegie to donate to the school.

Wilson appointed the first Jew and Roman Catholic to the faculty and helped free the board from traditional Presbyterian dominance. Wilson aimed to limit the influence of social elites at Princeton by abolishing upper-class eating clubs after reorganizing the school's curriculum and establishing the preceptorial system. Wilson's Quad Plan, which suggested relocating students to colleges known as quadrangles, was met with vehement opposition from Princeton alumni. Due to the severity of alumni criticism, the Board of Trustees directed Wilson to abandon the Quad Plan in October 1907.

Wilson clashed with Andrew Fleming West, dean of the graduate school, as well as ex-President Grover Cleveland, who was a trustee, late in his term. Wilson supported incorporating a proposed graduate school building into the campus center, whilst West preferred a more remote campus location. Princeton's board of trustees accepted a grant made to the graduate school campaign on the condition that the graduate school is placed off-campus in 1909. However, Wilson became dissatisfied with his employment as a result of the opposition to his proposals, and he began to consider running for politics.