Between the two world wars

During the First World War, activities at the Academy of Music could be pursued in relative peace. A civil war during the autumn of 1918 and subsequently the historical turbulences during the time of the Soviet Republic of Hungary, however, could not be kept outside the walls of the institute. In 1918, the Minister of Education recognised the institute as a college by authorising the use of the title "National Hungarian College of Music".

On 16 February 1919, Ödön Mihalovich was forced to retire and Dohnányi was appointed principal in his place. However, the political scene quickly became chaotic. Dohnányi, satisfying his foreign contracts, left the country, but Kodály felt it his responsibility to continue to oversee the College as vice-principal.

After the fall of the Soviet Republic of Hungary disciplinary procedures were launched against those who had taken any role in the previous period. Therefore, the Academy of Music was left without leadership at the beginning of the 1919/1920 academic year. The ministry wanted to solve the situation by placing Kodály, Dohnányi, Kerpely and Waldbauer on leave and summoned Hubay back from Switzerland where he had taken refuge. He was appointed principal on 13 November.

Hubay led the Academy of Music for 14 years. He studied at the College of Music in Berlin under Joseph Joachim, and by the age of 23 he had already been a professor at the Conservatory of Brussels. He returned to Hungary in 1886, where he was a leading figure of violin teaching for 50 years, until 1936. Hubay's students included many world-famous artists, such as József Szigeti, Stefi Geyer and Jelly Arányi (to whom Bartók dedicated some of his works) and Ferenc Vecsey. His masterclasses were attended by Emil Telmányi, Zoltán Székely, Ede Zathureczky (who continued his master's legacy as a professor at the Academy), Endre Gertler, Loránd Fenyves, Dénes Koromzay, Sándor Végh, György Garay (later professor at the Academy) and many others.

Kodály returned to the Academy of Music in 1921, where he was a professor of composition in the preparatory course and the academic course; he also taught composition as a secondary subject. His academic course not only educated composers but also musicians who formed and influenced the art of music and music pedagogy in Hungary for decades. The "Kodaly School" had 268 students between 1908 and 1940, among them Lajos Bárdos, Antal Doráti, Zoltán Gárdonyi, Pál Járdányi, György Kósa, László Lajtha, Mátyás Seiber, András Szőllősy, Sándor Veress. The 50th anniversary of the establishment of the Academy of Music was in 1925. On this occasion, at the suggestion of Hubay, the institute was named after Franz Liszt, and at the same time, a Liszt Museum was established in the building.

Chamber music education was launched by well-known artists like Hubay and Popper, who themselves often performed with their famous string quartet. They even succeeded in inviting the composer himself to some of their Brahms concerts. In 1910, the Waldbauer-Kerpely String Quartet was formed and a new era began in the history of Hungarian chamber music. Their programmes always included chamber works by Bartók and Kodály. Leó Weiner took over the chamber music classes at the Academy of Music after the First World War. He taught wind ensemble music and chamber music to pianists and string instrumentalists, and in 1928 he formed a chamber orchestra without a conductor. During his work spanning four decades a unique phenomenon came into being called the Hungarian chamber music school.

In 1934, Hubay retired after being honoured as president emeritus, and Dohnányi, one of the most influential figures of the era, followed him as president. Dohnányi was also the chief conductor of the Philharmonic Society and the chief music director of the Hungarian Radio. Many talented musicians graduated from his piano master class, like Andor Földes, Ede Kilényi, György Ferenczy, Annie Fischer, Endre Petri and Péter Solymos. Organizing the 1st International Liszt Competition in 1933 is regarded as one of his many great achievements.

At the same time as Dohnányi's appointment, the ministry granted Bartók the opportunity to pursue folk music research at the Academy of Sciences. This was when Kálmán Isoz, leader of the National Museum, became secretary of the Academy.

A few years later, difficulties arose during Dohnányi's presidency caused by political attacks and the events of the war, all in connection with anti-Jewish laws.