A group of Methodist men in the Wesley Foundation at the University of South Dakota had been carrying on a program as a religious fraternity, which they called Phi Lambda Phi, for some time when it occurred to them that perhaps men in other Wesley Foundations had similar groups which could be mutually helpful if they should form a union. This idea was brought up at a student council retreat held in Ames, Iowa, in 1924 and in February, 1925, invitations were sent to all Wesley Foundation units asking those interested to send representatives to an organizational meeting. This meeting was held in Lincoln, Nebraska, on April 6 and 7, 1925, and was attended by members of Phi Lambda Phi of the University of South Dakota, the Wesley Guild of the University of Nebraska, the Young Men’s Club of the University of Minnesota, and Methodist men’s organizations of Iowa State College, the University of Oklahoma, and Pennsylvania State University. Articles of Federation were drawn up and submitted to the individual groups for ratification and national officers were elected, and thus a national religious fraternity for Methodist men to be known as Phi Tau Theta was born. The name Phi Tau Theta was derived from the Greek words for "Friends of God," Philos Tau Theos.The Methodist men’s groups from Iowa State, the University of Nebraska, the University of South Dakota, and the University of Minnesota ratified the Articles of Federation and became the charter chapters of Phi Tau Theta. The group from Pennsylvania State did not ratify the Articles and the group from the University of Oklahoma had previously withdrawn when it was proposed that a chapter of the fraternity should be organized for Methodist men of the Negro race. The first national Conclave was held at Iowa State College on December 19–21, 1925. The Conclave adopted a constitution, drafted rituals, and set up other machinery necessary for the proper functioning of a national fraternity. The spirit of the group was well expressed in the Preamble to the national constitution which was drafted by Lee Carpenter of the Nebraska chapter and W. Meyer of the South Dakota chapter and adopted by the first Conclave: "Appreciating the need of a closer spiritual fellowship among men of Methodist preference in attendance at universities and colleges, and believing also that a fraternal organization of young men can do much to stimulate the development of high moral standards of college men and believing also that college and university men of Methodist preference, if so organized can have a more effective influence upon the student life, we hereby unite ourselves as Phi Tau Theta a fraternity of Christian men for the promotion of these ideals." In line with this spirit and desire to bring Methodist men into closer fellowship with each other and with the church, thus bringing them closer to God, five purposes of the fraternity were adopted: 1. To create a more intimate spiritual fellowship among Methodist men and to organize our life around Jesus Christ as the Master of life.
2. To develop leadership in the church, both as laymen and as professional workers.