By the turn of the century, the grandeur of the Washington Square area had faded somewhat. The northward migration in Manhattan had left the neighborhood looking worn. However, the cheap rents, relative isolation, cozy feel and already established reputation of the area made it highly attractive to a new wave of artists who began flocking to the area in the first decade of the twentieth century.

This new migration of artists, joined by journalists, social reformers, and intellectuals, resulted in what has become known as the Bohemian Era. Emma Goldman, John Reed, Margaret Sanger and Hutchins Hapgood, women and men who were interested in radical ideas such as those espoused by Freud, Marx and Nietzsche, joined artists like John Sloan and William Glackens. All sought a new way of life, to live counter to the norms of American society, which they saw as constricting and anathema to creative thought.

Bohemianism, and its exposure to the outside world through expanded subway lines into Sheridan Square and the extension of 6th Avenue, quickly caught the imagination of a nation in transformation. Consequently, the Washington Square area began a now familiar pattern of gentrification, making it too expensive for many struggling artists to live. At the same time, the Italian community to the south of Washington Square reached its high point in terms of population before World War I. With the immigration quotas of the 1920's, the community began to contract, but remained vital through the 1950's.

The University was growing, too. By 1933 NYU was the largest private university in the country with 40,000 students. The student body became more complex as women and ethnic minorities began diversifying the composition of the school. The Heights Campus, in the Bronx, remained wooded and rural, while the Washington Square campus bustled with urban energy. As NYU grew, it continued to reach out to the community, offering courses to part-time, working students, and vocational education for city employees.