CASAR was established in 2003 as result of a generous $5.2 million endowment from His Royal Highness Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud. The Memorandum of Understanding signed by Prince Alwaleed and AUB president John Waterbury stated that "the aim of the center is to promote better understanding between the United States of America and the Arab world, and to deepen knowledge in the Arab world of American society, politics, history, culture and institutions through teaching, research, and outreach programs."

In the Summer of 2003, a steering committee from the Faculty of Arts and Sciences was formed to develop the program. A full year of planning, consultation, and discussion laid the groundwork for all subsequent activities. The committee was initially chaired by Yahya Sadowski, Associate Professor of Political Studies. In January 2004, leadership of the committee was assumed jointly by Marjorie Henningsen, Assistant Professor of Education, and David Koistinen, Assistant Professor of History. In September 2004, Prof. Patrick McGreevy was appointed as CASAR's first director.

CASAR established a Minor in American Studies, hired visiting professors, initiated grants for AUB faculty and graduate students, established a lecture series, and began to sponsor international conferences.