The Settlement, in Shipton Street, Upperthorpe, Sheffield, was founded by the YMCA in 1918 (it opened the following year) under the Wardenship of Arnold Freeman. It succeeded an existing Neighbour Guild Settlement there which had developed financial problems. The Council of the YMCA in turn became concerned about debts accumulating under Freeman's ambitious Wardenship, and dissociated itself from the venture in April 1921, at which point Freeman was able to proceed with his educational plans. Having a Council of some forty members, not all of whom were active, but including respected local figures such as the Bishop of Sheffield and the Vice-Chancellor of the University, and nationally-known people such as Edward Carpenter and Arnold Rowntree (member of the noted Quaker Family and President of the Educational Settlements Association), its declared and ambitious Object was “to establish in the City of Sheffield the Kingdom of God”. The Method of achieving this was “Education”. The definition of “the Kingdom of God” was spelled out in the Settlement letterhead:

"By the Kingdom of God we mean streets along which it is a pleasure to walk; homes worthy of those who live in them; workplaces in which people enjoy working; public-houses that are centres of social and educational life; kinemas that show elevating films; schools that would win the approval of Plato; churches made up of men and women indifferent to their own salvation; an environment in which people "may have life and have it abundantly". By "Education" we mean everything by means of which people may become more spritual; everything that enriches human beings, with That which described in three words is Beauty, Truth and Goodness, and described in one word as GOD."

The story of the Sheffield Educational Settlement belongs with the history of the University Settlement Movement. Some Settlements had more formal university links, but all sought to bring education, improvement and hope to the lives of the poor and socially disadvantaged in the decades before the development of the Welfare State following the Second World War. The early decades of the Sheffield Settlement coincided with the serious hardship of the post-First World War era, typified by the Depression and mass unemployment.

The success of the Sheffield Settlement was due in large measure to the idealism and energy of its founder and Warden. Freeman came from a strongly middle-class background with a tradition of self-help, the family being non-conformist in religion and involved in the import of tobacco and the manufacture of cigars. They lived in the Hoxton area of London, though moved house at various times. Arnold's brothers and sisters were all gifted and became successful in business or the professions (his brother Ralph for example became consultant engineer for the Sydney Harbour Bridge; another, Peter, became a Labour MP). He and his brothers attended Haberdashers' Aske's School from where, in 1905, Arnold went up to St. John's College, Oxford, where his senior tutor described him as "an ardent socialist, keen and capable", and where he joined the Fabian Society. He was from an early age a vegetarian, and was familiar with social work as a member of Highbury Quadrant Congregationalist Church. Just before his advent into the Sheffield Settlement he and his sister Daisy spent a year at the Quaker Settlement in Woodbrooke, Birmingham. After this he began lecturing for the Universities of Sheffield, London and Oxford, doing extra-mural work in Tutorial classes. He also began lecturing for the Workers' Educational Association. In Sheffield these activities involved travelling out to mining areas in South Yorkshire. His subjects were initially History and Economic History, broadening into a concern with human nature and the higher life of mankind expressed in Literature, Art and Philosophy.

Around 1922 Freeman became an adherent of the philosophy of Rudolf Steiner and of the principles of Anthroposophy, convictions which led to some conflict with certain members of the Settlement's Council. Freeman always insisted on the paramountcy of achieving spiritual values through education.

Freeman himself came to Sheffield as a consequence of his employment by the University as a tutor, and members of the University's staff played a significant role in the lectures which formed a major part of the work of the Settlement, although the Settlement was not formally associated with the University. Other activities included recreation: courses of handicrafts, rambles and camping expeditions. One principal method of achieving the foundation's purposes was to involve the membership in the performance of plays, and the Settlement's Little Theatre put on a great variety of productions by the best serious dramatists, with some of whom Freeman corresponded. He never compromised over the quality of the work selected for presentation. Several notable local people, including industrialists, supported the work with donations, and a number of people later active in the public life of the city were associated with the Settlement.

The Settlement played a part in the area's Second World War pacifist movement, although Freeman, who was a conscientious objector in the First World War, and stood in 1923 as a Labour Parliamentary candidate in the unwinnable Hallam constituency, always argued strongly against Marxism.

Following Freeman's retirement in 1955 at the age of 69 the Wardenship passed to Christopher Boulton, an anthroposophist and lover of theatre. Up to the summer of 1961 Boulton produced some 20 plays, including his own play "The Doctor", in some of which he also acted, whilst continuing to teach a course on anthroposophy and arranging lectures on other subjects such as astronomy and Wagner's "Ring" cycle. But the end of the Shipton Street Settlement, whose work had to an extent been superseded by the post-war growth of state education and improvements in social conditions, was predicted in 1960 with the announcement of a road-widening scheme. Boulton continued as Warden until the summer of 1961, when he was succeeded, for some two or three years, by Sam Davidson. At the suggestion of Arnold Freeman the next, and last, Warden was Tim Martys; but after about a year the property, now becoming increasingly run-down, was finally demolished, and the Settlement, along with its Little Theatre, vanished. Its tradition was not entirely lost: Christopher Boulton had previously purchased a house in Meadowbank Road, Nether Edge, where he founded a Rudolf Steiner Settlement, and where the Merlin Theatre and the Arnold Freeman Hall continue to flourish. The Sheffield Repertory Company also had its origins in the plays presented by its members at the Little Theatre before they decided in 1923 to become independent of the Settlement.

The extensive collection of documents in the collection came to the University Library following its rescue from the redevelopment site, a procedure in which John Roberts, who made use of it in writing his dissertation on the history of the Settlement, played a part. Regrettably, Roberts notes that by the time of the rescue many of the records, particularly from the 1930s and early 1940s, had been badly damaged by rodents and were thus no longer available.