As early as 1924 the architectural office of Gropius in Dessau was commissioned by the city to plan a joint building for the Kunstgewerbe- und Handwerkerschule Dessau and for Bauhaus. After the move of Bauhaus in Spring 1925 and until the opening of the building on December 4, 1926 teaching took place at various locations in Dessau.

Bauhaus experienced a new revival that was accompanied by academic recognition and a change of the school system: now the school was called "Bauhaus - Hochschule für Gestaltung". Instead of a journeyman's certificate, the graduates received a diploma indicating the level of their education; the masters of the university were henceforth called professors. All the Bauhaus masters except for Gerhard Marcks, followed Gropius from Weimar to Dessau: Lyonel Feininger, Wassily Kandinsky, Paul Klee, László Moholy-Nagy, Georg Muche and Oskar Schlemmer. They all moved into the master houses designed by Gropius. Another innovation was the curriculum: the lessons orientated on industrial design became more important than the artistic subjects. The style of the corporate identity gained in modernity and brand image in Dessau due to the increased use of lower-case letters. Furthermore, the founding of a so-called Bauhaus GmbH led to students participating in the profits of the products they developed.

Due to the global economic crisis, the Bauhaus also had to struggle with negative external influences from the public. In 1928 Gropius handed over his position as director to the architect Hannes Meyer. With his takeover, Bauhaus Dessau was more consistently aligned to the socio-political guideline "People's needs instead of luxury needs". In 1930 Hannes Meyer was dismissed for alleged "communist machinations". He was succeeded by Ludwig Mies van der Rohe, the last director of the Bauhaus. He advocated the stronger activation of architectural teaching at the school. In 1932, under the majority seizure of power by the NSDAP in Saxony-Anhalt, the Bauhaus Dessau was dissolved by the state.