As the university grew, McMaster Hall started to become overcrowded. The suggestion to move the university to Hamilton was first brought up by a student and Hamilton native in 1909, although the proposal was not seriously considered by the university until two years later.[21] By the 1920s, after previous proposals between various university staff, the Hamilton Chamber of Commerce launched a campaign to bring McMaster University to Hamilton.[13] As the issue of space at McMaster Hall became more acute, the university administration debated the future of the university. The university nearly became federated with the University of Toronto, as had been the case with Trinity College and Victoria College.

Professional programs during the interwar period were limited to just theology and nursing.[24] By the 1940s the McMaster administration was under pressure to modernize and expand the university's programs. During the Second World War and post-war periods the demand for technological expertise, particularly in the sciences, increased.[24] This problem placed a strain on the finances of what was still a denominational Baptist institution. In particular, the institution could no longer secure sufficient funds from denominational sources alone to sustain science research.