This paper aims to contribute to the history of Brazilian educational and research institutions and at the same time to provide elements for the discussion on the nature of scientific organizations and how they operate. I also will address the larger issues facing research centers in Brazil, particularly the evolution and survival of scientific traditions in a context of institutional problems and scarcity of resources. My research focuses on history of the Instituto de Higiene, created in 1918 through a signed agreement between the State of Sao Paulo, the Sao Paulo School of Medicine and Surgery, and the International Health Board (IHB), an affiliate of the Rockefeller Foundation. Emerging in a period of intense institution-building in the field of biomedical science, the Institute of Hygiene is a telling case of the successful merging of state modernization targets and international aid. The work seeks to outline the process of the institutional reorganization of Brazilian science, highlighting the first steps of the scientific traditions that burgeoned in the Instituto de Higiene, as well as its process of consolidation. The organizational challenges have been given special attention. Having established a reputation for serious teaching and research, the institute was nevertheless affected by the crises that shook profoundly the national scientific establishment, such as scarcity of resources, instability and disruption in management, internal conflicts and external pressures.