Founded in 1969 by Mary Leue, the Albany Free School is the oldest inner-city independent alternative school in the United States. It all began when Mary’s ten-year-old son became so miserable in one of Albany’s better public schools that he asked his mother if she would teach him at home instead. Soon three of Mark’s also-suffering friends joined in and with that a little school was born. In June, Mary and her four students voted unanimously to continue the school for another year, with another vote establishing the name “The Free School.” At that point Mary began visiting other free schools, such as Jonathan Kozol's Roxbury Community School in Cambridge, Massachusetts and Orson Bean's Fifteenth Street School in New York City. She also conferred with educational filmmaker Alan Leitman and returned to Albany carrying three of Leitman's films, which she then showed around the city to growing audiences. Suddenly, four students became seven, two more teachers climbed aboard, and the need for a building led the group to a dilapidated inner city church.

The move accomplished two things: they could afford the $100 a month rent and the location ensured that the school would be racially and socio-economically diverse. What followed was a wild and tumultuous year, with parents battling over educational philosophy and practice, with kids from opposite ends of the spectrum thrashing out their own issues, and with several city departments (building, fire, and education) vying to shut down this radical storefront institution.

Two important developments came out of that initial year of constant trial and error. First, teachers and parents hammered out, in a series of intense sessions, the policy that only those actually present day-to-day in the building could determine the school policy. Others were welcome to attend meetings and to advise and suggest, but that would be the extent of their power. This absolute internal autonomy remains an operational cornerstone. Next, in order to empower the kids to participate in school governance, and to give them a way to nonviolently work out their differences (which were many in that initial period), Mary and the other teachers instituted a "council meeting" system, whereby anyone with a serious problem could call a meeting at any time, with everyone dropping what they were doing and attending. Meetings would be student-led and democratically run by Robert's Rules of Order, and provided a safety net for everyone, ensuring that freedom didn’t turn into license.

A fire during the following summer forced the school to seek a new home. This time they were able to buy an old parochial school building on a different edge of the same neighborhood. Over the next several years Mary was also able to acquire seven other run-down buildings on the block for an average of $2,000 each. Here Mary was acting on the advice of Jonathan Kozol, who strongly advocated that free schools develop some sort of business enterprise so that they wouldn't be tuition dependent and therefore accessible only to middle-class children.

Staff, parents and a host of volunteers then spent the next ten years slowly rehabilitating the buildings apartment by apartment, which were then used to house Free School teachers, interns, and families, and to generate much-needed income for the school. By the fall of 1973 the school was burgeoning with thirty kids, six full-time teachers, and a host of interns and volunteers. Students came from both inner city and uptown neighborhoods and from suburban and rural towns as well.

The extraordinary diversity of the student body became one of the school's strongest assets. It was an intense place to say the least. Because the pay was miniscule, a number of the teachers were attempting to live together semi-communally in school-owned housing. The students’ emotional struggles tended to bring up teachers' unresolved issues. The need for some sort of forum outside of school where the adults could resolve their conflicts and deepen their communication with each other became clear, and so Mary started a teacher support group, which has now been meeting continuously since 1974.

By the late-seventies a core group of committed staff had coalesced and began putting down roots by buying their own homes on the block for the same low prices that Mary had paid for the Free School buildings. Already equipped with the necessary rehabilitation skills and tools that they had acquired while fixing up the school buildings, they devised a cooperative system for helping each other with their houses. At the same time teachers started to have children of their own and also to share childrearing responsibilities. The high level of cooperation resulted in a deepening sense of connection and gradually led the group to begin referring to itself as "the Free School community."

With the school on a firm footing, Mary conceived a number of satellite projects aimed at addressing the needs of community members. One she dubbed the "Money Game," which is part credit union and part cooperative investment group. Members are able to earn a much higher return by pooling their money and can also utilize the fund's assets to make loans to each other at much lower interest rates. Partially in response to the arrival of so many community babies, Mary, with assistance from Betsy Mercogliano, founded the Family Life Center in order to offer perinatal support to pregnant couples, parenting support to parents of young children, and to teach self-help medical care. The center had an immediate synergistic effect on the school and the community, with the outreach services of the center drawing in many new families. The Family Life Center is still thriving today serving families in search of alternatives to the current medical models of care. Later, Mary and Nancy Ost, who had previously run a natural foods store in Albany, started up a coop in the basement of the Family Life Center building, providing easy access to organic foods at wholesale cost. At the same time several community families collaborated on a small organic farm with goats, chickens, honeybees and large gardens on nearly an acre of vacant land on the block that they purchased together.

In the early 1990s the Native American rights activist Hank Hazleton gave the school 250 acres of semi-wilderness land so that it could establish a wilderness learning center and forever-wild sanctuary. After Hank’s death, the school purchased his small house across the road, where a Free School family has created a small subsistence farm and runs wilderness education programs for children. Both school and community continued to thrive. At present, the school's enrollment stands at about sixty-five, with approximately sixty people or so making up the Free School community.