In 1921, the American Women's Physical Therapeutic Association (later called the American Physiotherapy Association) was founded by Mary McMillan (1880-1959), one of the pioneers of the physical therapy profession and the founding president of the American Physical Therapy Association. Born in Hyde Park, Massachusetts and educated in England, she was the first physical therapy aide in World War I, where she oversaw the training of reconstruction aides and became known as "The Mother of Physical Therapy" in the U.S. Army. She also organized one of the first courses in physical therapy in the U.S., at Reed College in Oregon, and she established the first physical therapy training center in China at Peiping Union Medical College. Under her leadership, rehabilitation aides battled the raging polio epidemic that began in 1924 (it would last until 1956), and these nascent physical therapists worked hard to strengthen and rehabilitate victims.

By 1928, a council on physical therapy was established within the American Medical Association (AMA), and a standard for length of PT education was set at 9 months. Education remained under the direction of the AMA until 1977. Physical therapy historians agree that physical therapy evolved as a professional field as a response to the polio epidemic, during which therapists worked in conjunction with physicians to battle the disease, reeducating weakened muscles through exercise and applying thermal hot packs to painful joints. The polio epidemic in the United States would kill 6,000 people and paralyze 27,000 more; in the early 1950s there were still more than 20,000 cases each year until a vaccine (Salk's) proved successful in 1955.

In the 1960s, amendments to the social security act that created Medicare and Medicaid necessitated an increase in physical therapy manpower. Persons over 65 were now able to receive physical therapy in the acute care and outpatient setting through federal insurance (Medicare), so more people could afford them, and in turn, sought these services. Likewise, persons under the national poverty line received rehabilitation services through Medicaid, so more people previously unable to afford these services now wanted them. During this decade, the physical therapist assistant position was developed to help meet the growing needs of health care personnel.

In the 1970s, the APTA House of Delegates (a body of physical therapists representing each state to the American Physical Therapy Association) established standards for accreditation of all schools of physical therapy. Currently, there are 203 accredited schools of physical therapy in the United States, including one in Puerto Rico. All are accredited by the American Physical Therapy Association and therefore are subject to periodic quality review and evaluation by the Commission on Accreditation of Physical Therapy Education, an outside accrediting body that conducts periodic quality reviews of all existing physical therapists.

In the 1980s, the APTA upped the certification requirements for physical therapists to masters-level programs, thus transitioning the terminal degree for physical therapists from a baccalaureate to master's level. In the 1990s, the American Disabilities Act was signed mandating reasonable accommodation for all persons with disabilities and disease, increasing the need for physical therapists to prepare persons with disabilities for the workplace and to prepare and inform employers about the needs of disabled persons. The profession of physical therapy has continued to evolve and mature as a profession in response to the aging population, new epidemics such as AIDS and cancer, and the increasing incidence of head and spinal cord injury due to increased violence in urban areas. The profession has expanded its vision to include exercise as a form of disease prevention, continued to revise evaluation and treatment protocol for traditional patient populations such as those involving stroke and spinal cord injury, and continued to insure that practice techniques are based on evidence-based research as opposed to theory and common practice. The profession also continues to change in response to managed care and new reimbursement policies and procedures. The American Physical Therapy Association intends all states to be direct access (not requiring referral from a physician) states by the year 2010.