The purpose of this article is to explore the sociological and historical underpinnings on institutional autonomy and accountability. The recent accountability movement in higher education emphasizes the institution’s role in the larger societal system. This role is defined by the relationship between the higher education institution and society. Because the relationship between higher education institutions and government has its roots in the earliest days of higher education, the relationship was reviewed in the perspective of history. Further, because an overemphasis on accountability tends to compromise institutional autonomy, the tension between accountability and institutional autonomy was discussed. New accountability systems in higher education have threatened to interfere excessively with the work of academia. One of the most difficult issues related to the management of higher education, then, is the need for balance between external accountability and the recognition of the autonomous nature of the institutions.