The creation of the Arab Open University came as a personal initiative of HRH Prince Talal Bin Abdelaziz, President of the Arab Gulf Program for United Nations Development Organizations. Although roots of the concept go back to 1976, it was the more formal call, made by HRH Prince Talal in 1996, for establishing such an institution; and that did put the concept on a serious track.

Following a feasibility study, undertaken by a major international firm in 1999, a Working Group, under the Chairmanship of HRH Prince Talal, started laying down the general framework for establishing the AOU. In June 2001, a formal launching of the institution was made at the Headquarters in Kuwait. Plans were later reiterated for the actual inauguration, in October 2002, of three Branches in: Kuwait, Jordan, and; followed later on, in February 2003, by the launching of three other Branches in Saudi Arabia, Bahrain, and Egypt.

The AOU is governed by a Board of Trustees, under the Chairmanship of HRH Prince Talal. Queen Rania Al-Abdullah of Jordan serves as a Co-Chair. Operational aspects are regulated by an established Charter, supported further by detailed Bylaws, and appropriate Rules and Regulations.

The Saudi Arabia Branch (SAB) was formally launched in February 2003 in a central location in Riyadh. It started with an initial enrollment of 1500 students. Due to local restrictions dictated by the Saudi Ministry of Higher Education, the SAB leased two adjoining buildings to serve as premises of learning centers, one for female students, and another for male students.

Later on, following a gradual and progressive plan, the Branch moved to other locations outside the capital, Riyadh, in order to reach out to distant and remote areas of the Kingdom. Currently, the SAB hosts, as well, Regional and Study Centers in Jeddah, Hail, Ahsa, Dammam, Medina.

The SAB is the first academic institution in the Kingdom to adopt an open system of higher education. In the short life of the Branch, it is gratifying indeed that the pioneering concept of Open Education has been accepted in the country to the extent that the SAB now enjoys full local accreditation by the Ministry of Higher Education.