That was exactly half a millennium ago this autumn. The school became the cradle of the Protestant Reformation and remained for a long time a leading institution of higher learning in all of Europe.
Martin Luther was the most illustrious professor of this university that now bears his name, as does the town -- "Lutherstadt Wittenberg." It was here that this Augustinian friar discovered the answer to his wrenching question, "How do I find a gracious God?"
In Wittenberg in the year 1511, Johann von Staupitz, his superior, guided him to the liberating message that the answer lay in God's love made manifest in Christ.
One year later, Luther became permanent professor of Scripture at this young university. Then he discovered the treasures of the Gospel, chiefly the good news that man does not become righteous before God for the sake of his good behavior but by God's grace alone through faith in Christ's redeeming work and sacrifice.
And with this in mind Luther changed the course of history forever when on Oct. 31, 1517 he nailed his 95 theses to the door of the Wittenberg Schlosskirche (Castle Church), protesting the practice of other monks who sold God's grace for money.
Against these salesmen of indulgences, who pretended to knock years off people's time in purgatory provided they paid handsomely, Luther thundered, "Every truly repentant Christian has the right to full remission of penalty and guilt, even without letters of pardon."
Ironically, Wittenberg is a university town only by name now. It has a few research institutes, but no students have actually attended classes there since 1817 because the city had become an unsafe place during the European wars of the 18th and 19th centuries.
Wittenberg was a fortress then, not the right place to pursue theology or philosophy or the fine arts. In the 7-Year War (1756-63) between France, Saxony, Austria and Russia on the one side and the Prussian-British alliance on the other, much of the Castle Church was blown to bits.
So the university merged with its younger rival in nearby Halle. The two schools became the Martin Luther University Halle-Wittenberg. It has been celebrating its jubilee cheerfully throughout much of this year, with the festivities building up to a crescendo on the actual birthday, Oct. 18.
But according to church historian Udo Straeter, chief organizer of these festivities, the university, though venerable, is still an institution on the mend, especially its divinity school. Where in Luther's day up to 500 young men prepared for the ordained ministry, there are only 95 now, plus some others studying to be religion teachers.
"This reflects the secularization in this part of Germany," Straeter told United Press International in an interview Tuesday. It began in the 1920s but accelerated under the two tyrannies that succeeded each other -- first the Nazi regime, then the Communist dictatorship.
In Halle, birthplace of George Frederick Handel and once a center of Lutheran pietism that preached the personal devotion to the Redeemer, only 10 percent of the inhabitants belong to a Christian denomination. And in Wittenberg, a former bastion of Lutheran orthodoxy that was antagonistic to pietism, the share of Christians is not much larger, Straeter reported.
"Of the people in Wittenberg only a few are familiar with its past. The town fathers are trying valiantly to teach their burghers why their place bears the title, 'Lutherstadt.' The Nazis and then the communists have succeeded in blotting this knowledge out of the public consciousness."
The situation is almost embarrassing: Tourists, especially Americans, keep pouring into this town, and are being encouraged to come in even greater numbers. They stroll through the Schlosskirche, stop at Luther's tomb under its pulpit, and at the burial place of the brilliant Philipp Melanchthon, his most important collaborator, across the nave.
They visit the former Black Monastery, where Luther was once a monk and continued to live with his family after the Reformation. They take photographs of the statue of Luther pointing at the Bible, against the backdrop of Wittenberg's illustrious town hall.
But most of the locals are clueless about all this. Only slowly, their awareness of the most important figure in their town's and their country's history is being raised, for example with the public celebration of Luther's wedding anniversary every July.
If this sounds bad enough, consider this: Even among the Protestant clergy in this region there prevails what Straeter called a "Luthervergessenheit," or obliviousness of the Reformer's powerful teachings.
Like in many of the Western mainline Protestant churches, pastors prefer to engage in social engineering, rather than preach the Gospel the Luther had dusted up at this place nearly half a millennium ago, the professor explained.
"This is slowly beginning to change," said Straeter, who as a historian thinks in larger timeframes than many other academics. Almost cheerfully he added, "If all goes well, things will be normal around here again in 20 or 30 years' time."