The AJI was created in 1939 by Professor Henry Seishiro Okazaki, The organization was initially known as the America Jujitsu Guild. Its first president was Charles Wagner. After the attack on Pearl Harbor, the Hombu was closed by the authorities. A senior student, William Ah Moo, succeeded in convincing the military authorities to allow training to continue and the Hombu was reopened. During the same period, Professor Okazaki was interned twice.

The name of the organization was changed to the American Jujitsu Institute in 1943. The AJI was officially incorporated on July 29, 1947 in the Territory of Hawaii. A new constitution was drawn. It's president at the time was Dr. A.M. Glover. Professor Okazaki was the honorary president. Charter members included Professors Jack Wheat and Wally Jay.