The academy was created in 1934 in New York City by Mrs. Marie Bullock with a mission to "support American poets at all stages of their careers and to foster the appreciation of contemporary poetry." In 1936, the Academy was officially incorporated as a non-profit organization. Ms. Bullock was the president of the Academy for the next half a century, running the Academy out of her apartment for thirty of those years. She started the academy after her return from her studies at the Sorbonne in Paris. The Academy's webpages describe Bullock's motivation in creating the Academy as follows: "When Mrs. Bullock returned to the United States from her studies at the Sorbonne in Paris, she was dismayed to find a comparative indifference toward poetry in our country. Concerned about the lack of financial support given to poets in America and their inability to make a living from their art, she decided to take action. With the advice of friends such as poets Edwin Arlington Robinson and Joseph Auslander (the first Consultant in Poetry to the Library of Congress), Mrs. Bullock drew up the plans and started raising funds to nurture the cause of poetry and the survival of individual poets."

It administers several programs: National Poetry Month; online educational resources, including free poetry lesson plans for high school teachers; the Poetry Audio Archive, a collection of over 700 recordings dating back to the 1960s; and the website Poets.org.

There are seven major awards handed out by the Academy and over 200 college awards sponsored at schools across the country. The Academy also runs numerous programs, including Poets.org, the most popular site about poetry on the web; National Poetry Month (April), the largest literary celebration in the world; an array of Awards & Prizes for poets at every stage of their careers; American Poet, a biannual literary journal; a web forum; and the Poetry Audio Archive, which includes hundreds of recorded poetry readings dating back to the early 1960s.

In 1998, the operations of the Academy drew media attention when two of its chancellors, Maxine Kumin and Carolyn Kizer, resigned to protest the absence on the Academy's Board of Chancellors of African-Americans and other members of minorities. The Academy ultimately responded by designating several new chancellors, including African-American poets Lucille Clifton and Yusef Komunyakaa, and by making changes in its procedures.

In 2007, it was among over 530 New York City arts and social service institutions to receive part of a $20 million grant from the Carnegie Corporation, which was made possible through a donation by New York City mayor Michael Bloomberg.

Awards are listed in chronological order of their creation.

Academy Fellowship

One Academy Fellowship is awarded annually for "distinguished poetic achievement"; Fellows are awarded a stipend which is presently $25,000. The Fellowship program was created in 1946, and was the first of the Academy's current portfolio of awards; the Academy's website describes it as "the first of its kind in the United States."

James Laughlin Award

Formerly known as the Lamont Poetry Selection, the Laughlin Award is given in recognition of a poet's second published book, and is considered to be the only major award honoring excellent second books.

The award was first established in 1954 by a bequest from the wife of Thomas W. Lamont, who specified that it be used "for the discovery and encouragement of new poetic genius." In 1959, Harvey Shapiro referred to the award as "roughly, a Pulitzer for bardlings."Initially, the Lamont Poetry Selection was awarded to a poet's first published book; copies of the book were purchased from its publisher for distribution to the Academy's members. In 1975, the Academy changed to selecting a poet's second published volume; in an editorial, Peter Davison welcomed the change, suggesting that publishing a second volume was becoming more difficult than publishing the first.

In 1995, it was endowed by a gift from the Drue Heinz Trust, and it was renamed to honor James Laughlin, who founded the publishing house New Directions in 1936. At present, winners receive a cash prize of $5,000 and the Academy purchases about 3000 volumes of the winning book for distribution to its membership; the purchase and distribution essentially guarantee that the book becomes "a bestseller in the tiny poetry market."

Edward Field has described the importance of receiving the Award to his career as follows:

... perhaps it is just as well that I didn't succeed in getting a publisher earlier, since, with new poems being added all the time, the manuscript kept getting stronger. But years of rejection took their toll, and when I won the Lamont Award in 1962, I kept repeating "I will not be consoled." But I was. My life changed considerably. For one thing, I could make a living - I gave poetry readings around the country, wrote narrations for a couple of documentary films, translated a book of Eskimo poems, and, yes, even taught poetry workshops for a while.

—Edward Field

Several of the Award's recipients have subsequently won the highest honors given to mature poets. Donald Hall was named Poet Laureate of the United States in 2004. Donald Justice, Lisel Mueller, and Philip Schultz have each won the Pulitzer Prize for Poetry.

Lenore Marshall Poetry Prize

The Lenore Marshall Poetry Prize is awarded annually for the best volume of poetry written by a living U.S. citizen and published in the previous year in the United States. The Prize was created in 1975 by the New Hope Foundation of Pennsylvania, which was a philanthropic foundation created by Lenore Marshall and her husband, James Marshall, to "support the arts and the cause of world peace"; Lenore Marshall, a poet, novelist, editor, and peace activist, had died in 1971. Receipt of the prize has been among the distinctions noted by the Library of Congress when the Poet Laureate of the United States is named.

The Prize was initially administered by the Saturday Review magazine. Following the folding of Saturday Review, the Prize was administered by The Nation magazine. In 1995, administration of the Prize became the responsibility of the Academy; the Prize has a permanent endowment, and the cash value of the prize is currently $25,000. The Prize is still sponsored by The Nation, which usually publishes an article about the poetry of each year's finalists and winner.

The Academy currently announces three judges for each year's competition in advance. There has been some criticism of the Academy's procedures for mitigating the judges' conflicts of interest, since the judges are often acquainted with some of the poets whose volumes are nominated.

Walt Whitman Award

Named after poet Walt Whitman, the award is based on a competition of book-length poetry manuscripts by American poets who have not yet published a book. It has been described as "a transformative honor that includes publication and distribution of the book though the Academy, $5,000 in cash and a one-month residency at the Vermont Studio Center." The Library of Congress includes the Award among distinctions noted for poets, as does the Poetry Foundation and The New York Times, which also occasionally publishes articles about new awards.

The award was established in 1975. In a New York Times opinion piece from 1985, the novelist John Barth noted that 1475 manuscripts had been entered into one of the Whitman Award competitions, which exceeded the number of subscribers to some poetry journals. Since 1992, Louisiana State University Press has published each volume as part of its "Walt Whitman Award Series"; the Academy purchases and distributes copies to its associate members, along with copies of the winning volume for the James Laughlin Award. About 3000 copies are involved.

Harold Morton Landon Translation Award

Established in 1976, the Landon Translation award is given in recognition for a published translation of poetry that is at least 40 pages in length and ran for more than 500 copies. It was initially awarded biannually until 1987 when it became an annual award. The winner received a $1,000 cash prize.

Wallace Stevens Award

Named for Wallace Stevens, the award was established in 1994 to "recognize outstanding and proven mastery in the art of poetry" and presents winners a check for $100,000.

Raiziss/de Palchi Translation Awards

Established in 1995, the award seeks to recognize American translators for "outstanding translations into English of modern Italian poetry" that have been published through non-self-publication means. The prize alternates annually between a straight $5,000 book price and a fellowship at the American Academy in Rome and $20,000 for use in advancing a "significant work-in-progress", such as through travel or study. The award is administered for the New York Community Trust and funded by a bequest from Sonia Raiziss Giop

University and College Poetry Prizes

The Academy first began awarding annual $100 prizes to student poets at ten American universities and colleges in 1955. The program has since expanded to include more than 200 schools. According to the Academy, most of these prizes are endowed in perpetuity, though some are funded through other arrangements with the school or through private donors. For a school to become part of the program, a $2,500 endowment contribution is required. Individual schools set the winning criteria for their awards, within the guidelines set by the academy: winners must be registered students at the school and the school cannot restrict the themes or styles of the entries.