Located in the historic district of Chapel Hill, The Carolina Inn was built in 1924 by John Sprunt Hill, 1889 alum of the University of North Carolina, Chapel Hill and founder of the Bank of Durham. Arthur C. Nash designed the Inn and termed the building style Southern Colonial for its Georgian, Neoclassical, and European influences. From the day it opened, The Carolina Inn has been a gathering place for students, faculty, returning alumni, and local townspeople.

After operating the Inn as a private enterprise for a decade, Hill donated the property to the University in 1935 to serve as "a cheerful inn for visitors, a town hall for the state, and a home for returning sons and daughters of alma mater." The only stipulation was that after meeting its standard expenses, the profits generated by the facility would support the North Carolina Collection. Since 1924, The Carolina Inn has undergone multiple renovations sought to return the Inn to its original grandeur and traditional warmth, while offering guests impeccable services and amenities.