Founding within Duke University

Joseph Banks Rhine and his wife Louisa Rhine arrived at Duke University in 1927 at the invitation of the psychologist William McDougall, who had just become chair of Duke's psychology department and wanted to bring a program of experimental research on unorthodox mental phenomena into a mainstream university setting, a deliberate departure from the case collecting and mediumship investigation that had dominated psychical research until then.

Working initially within McDougall's department, Rhine began systematic card guessing experiments in 1930 using a specially designed deck of five symbols, later known as Zener cards, asking subjects to guess the order of shuffled cards under controlled conditions and comparing the results against chance expectation using formal statistics. The program formally took the name Parapsychology Laboratory in 1935, giving Rhine's research group its own institutional identity within Duke while McDougall continued to chair the parent department until his death in 1938.

Rhine's 1934 book Extra-Sensory Perception, published just before the laboratory took its name, argued that his results showed statistically significant evidence for telepathy and clairvoyance that could not be explained by chance, and made both Rhine and Duke's program the most publicly recognized center of parapsychological research in the world for the next three decades.