The aim of this paper is to clarify the circumstances in which the idea was formulated of founding public universities, as those designed to be established by local public bodies such as prefectures, and also to define the real condition contained in the idea, under the prevailing "Imperial University System".The system was introduced by the enactment of the Imperial University Act(Teikoku Daigaku Rei)in 1886, which stipulated that all universities in Japan be national universities having plural faculties.This study is intended for approaching the aim by focusing on the development of the theory of university by Aihiko Sata and examining its historical meaning.Sata was president of the Osaka Prefectural College of Medicine and took a leading part in upgrading it to the first public university, Osaka University of Medicine, in 1919.The study primarily revealed the following:(1) In 1910′s, in order to reform the higher education system, the government set up an educational investigation committee and a special educational conference, preparing for the new university law for chartering national, public and private universities, the law to be enacted in 1918.In the policies discussed then, however, almost no interest was shown in elucidating the idea of founding public universities; besides, there was a limited comprehension that the local public bodies or prefectures, as the principal bodies for establishing public universities, were not independent self-governing bodies but merely a part of the local administrative district of the nation.(2) It was Sata who formulated the idea of founding public universities under the circumstances.(3) The idea was that public universities were supposed to be established by the urban bourgeoisie against the imperial universities and that, assuming "freedom of university" was secured on the basis of the financial independence, these public universities should play the central role in the development of urban culture, through practical studies and social activities such as extension courses.(4) Sata did not have this idea from the beginning.He traveled in Europe and the U.S.A.in 1912-1913 to inspect universities and hospitals, crystallizing his idea on the knowledge and information of the new movement for chartering universities in Frankfurt, Hamburg and Dresden in Germany.These cities have been trying to establish not national but municipal universities, which deeply impressed Sata.(5) The Sata′s idea so formed seems to have influenced the theory of university by Hajime Seki, notable mayor of Osaka City and known as the founder of Osaka Municipal University of Commerce (1928).(6) While Seki attached importance to the autonomy of cities, Sata never thought much of it just like the policy planners during the enactment of the university law.Sata had thought urban prosperity was unconditionally connected to national prosperity. In this sense, Sata′s theory of university was not the complete denial of the imperial university system, while the subject was taken over by Seki.