The Center for Transcultural Studies was founded as the Center for Psychosocial Studies in 1973. Drawing from the faculties of the University of Chicago and the Chicago Psychoanalytic Association, its first director was Professor Robert LeVine, now at Harvard University; its first chairperson was Paul Yvilsaker, dean of the Graduate School of Education at Harvard University, and later president of the Council of Foundations. The Center was created as a private not-for-profit research institution dedicated to fostering multidisciplinary research in the humanities, psychology and the social sciences, and also committed to applying such research to public policy. Within this mandate, the center supported specific projects which resulted in over two dozen books and several hundred articles on applied, empirical and theoretical issues at the forefront of psychology, linguistics and anthropology. Because of its interest in comparative work, the Center began to build up an international network of colleagues.

In 1986, the CTS received a series of grants from the Roosevelt, MacArthur and Rockefeller foundations to develop projects focusing on the internationalization of culture and communication. It also initiated projects with other centers in the United States and abroad. The CTS established a research center at the University of Foreign Studies in Beijing in 1988, and began a series of projects with colleagues in Hong Kong, Taiwan, Mainland China, Russia, India, France, Germany, England, and Canada.

The Center began with an interest in the interface of psychological and social theory. During the early years (1973-1976), the dominant psychological approach was psychoanalytic. The principal goals were to bring the insights of psychoanalysis, particularly the emerging psychology of the self, to bear on other domains of social science and the humanities and into greater consideration in the development of social policy. These goals were advanced through seminar series (called workshops during this period) and research projects. The clinical orientation of psychoanalysis was seen as an especially strong barrier to cross-field communication with the more academically oriented social sciences but, at the same time, there was a belief that aspects of the clinical interview technique of psychoanalysis could be useful in other social science investigations. Inversely, there was an interest in broadening the psychoanalytic field through such dialogue. The principal participants in these activities were academic social scientists with interest in psychoanalysis and clinical practitioners of psychoanalysis.

The Center's psychological orientation during this period was not confined to the psychoanalytic, however, and the interest in psychoanalysis with its emphasis on affective issues was coupled with a contrasting interest in cognitive issues, especially cognitive developmental theory. The comparison of these two approaches and theories formed an important part of the Center's activities for some time. The interest in psychological development included the adult years, especially the second half of life. Also, general issues in the philosophy of science and various important integrative attempts within the social sciences such as sociobiology and systems theory were explored in seminar series. An array of scholars with interests other than psychoanalysis thus became involved in Center activities.

With time it became increasingly apparent that most psychological theories were inadequate in several ways given the Center interests in bringing together psychological and social approaches. In particular, the theories were uniformly weak in their conceptualization of social phenomena. The conviction emerged that there was a need to explore more vigorously the social context and determination of individual behavior. This could not be done simply by attaching a social theory to a psychological one or by generating social dimensions out of psychological ones, but involved finding or building theories which simultaneously considered both individual functioning and social interaction from a unified point of view.

Thus, work at the Center shifted increasingly toward a consideration of the social context of behavior and development (1977-1980). This involved not only an attempt to clarify the social possibilities latent in or compatible with the psychoanalytic and cognitive developmental perspectives, but also to look for other psychological approaches with more well-developed theories about the role of social interaction, especially dyadic adult-child interaction. A central interest was the child's acquisition of such social skills as language, perspective representation (roletaking), and internalization of adult strategies. However, even as the Center moved toward a fuller consideration of the impact of social factors, the emphasis remained relatively psychological and most Fellows were psychologists.

During this period, there was also an increased emphasis on the importance of sign phenomena (especially language) in mediating individual behavior. This led to a broader interest in semiotics as a possible alternative to those perspectives which focused narrowly on the individual or on society. Particularly important at this time was the work of the Russian psychologist L.S. Vygotsky; his interest in a more social and semiotic approach to psychological development became a critical bridge from our psychological work to our future interests in semiotics and social theory. This approach eventually developed into a full-fledged consideration of the importance of semiotic mediation in psychosocial activity (1980-1983). Theories of long-standing interest at the Center were reexamined in light of a semiotic perspective and more interpretive approaches such as those of cultural anthropology were given increased emphasis. Further, by using the semiotic approach new links were made to areas outside of traditional social science such as literary analysis and legal theory. During this period, the size of the in-house staff was expanded to include more scholars with expertise in the areas of sociology, anthropology, and social history.

The mid-1980s interests of the Center developed from the fusion of two lines of research already apparent in the preceding period. First, the shift from a concern with smaller social units (e.g. dyads, sets of immediate speech participants, etc.) to broader social forms was completed. In particular, serious consideration was given to more historically and culturally informed modern social theories which were self-critical in their recognition of the distinctively Western nature of the assumptions, methods, and theories of traditional social and psychological science. Much of this era's work at the Center was aimed at understanding the sociohistorical roots of Western society and the relation of these configurations to the shape of contemporary social science. Some of the concerns were with the nature of science itself, while others were with the specific ethno- or sociocentric content of various social, psychological, or semiotic theories.

This interest in self-critical social theories converged with an independent line of research concerned with intrinsically self-reflexive dimensions of semiotic approaches. This involved the recognition that social science assumptions, methods, questions and theories were themselves subject to the same semiotic influences as those aspects of psychosocial functioning which they took as their object.

Both of these approached recognized that the conduct of research activity itself is a psychosocial activity and that this very reflexivity demands a critical attitude on the part of the investigators as to the nature of their understandings. The similarities between the self-reflexive elements in the semiotic approach and self-critical social theories raised the possibility of a complementary or even a unified critique of the epistemological underpinnings of many modern psychosocial theories. Through diverse projects this concern with the historical, cultural, and semiotic basis of psychosocial theory constituted the core of continuing activity at the Center from 1983 to 1986.

Multidisciplinary fora on specific topics began meeting during the mid-1980s and continued their work as the Center changed its identity to the Center for Transcultural Studies.