This paper examines the history of sponsored research and industrial relationships at the University of Michigan. For the purposes of this paper, sponsored research is defined as research performed by the university that is funded by an outside constituent. Although this paper covers events from the start of the twentieth century, it concentrates on the events after Word War II until the Vietnam War, when the role of the federal government changed and sponsored research flourished tremendously. Specifically, it follows the development of the Division of Research Development and Administration (DRDA) and the Office of Vice President of Research (OVPR). The central issue in this paper is the inherent conflict among various stakeholders in sponsored research. The existence of formal department(s) overseeing sponsored research served to both encourage and control its development. It was a tool for the university as much as for the entrepreneurial faculty. This is a story of how sponsored research became a valuable mechanism to preserve the teaching mission of the university and to guide the development of research as to complement that mission, by encouraging faculty to be present in the university and limiting their involvement in the world beyond the university walls. At the same time, this paper describes the tensions that emerged in the face of centralization and legislation; and of the defining moments that shaped the research policies in the decades after.