RSS was founded in 1925 by Keshav Baliram Hedgewar, a doctor in the city of Nagpur, British India.

Hedgewar was a political protege of B. S. Moonje, a Tilakite Congressman, Hindu Mahasabha politician and social activist from Nagpur. Moonje had sent Hedgewar to Calcutta to pursue his medical studies and to learn terrorist techniques from the Bengali secret societies. Hedgewar became a member of the Anushilan Samiti, an anti-British revolutionary group, getting into its inner circle. The secretive methods of these societies were eventually used by him in organising the RSS.

After returning to Nagpur, Hedgewar organized anti-British activities through the Kranti Dal (Party of Revolution) and participated in Tilak's Home Rule campaign in 1918. According to the official RSS history, he came to realize that revolutionary activities alone were not enough to overthrow the British. After reading V. D. Savarkar's Hindutva, published in Nagpur in 1923, and meeting Savarkar in the Ratnagiri prison in 1925, Hedgewar was extremely influenced by him, and he founded the RSS with the objective of strengthening the Hindu society.

Hedgewar believed that a handful of British were able to rule over the vast country of India because Hindus were disunited, lacked valour (pararkram) and lacked a civic character. He recruited energetic Hindu youth with revolutionary fervour, gave them a uniform of a black forage cap, khaki shirt (later white shirt) and khaki shorts—emulating the British police—and taught them paramilitary techniques with lathi (bamboo staff), sword, javelin and dagger. Hindu ceremonies and rituals played a large role in the organisation, not so much for religious observance, but to provide awareness of India's glorious past and to bind the members in a religious communion. Hedgewar also held weekly sessions of what he called baudhik (idealogical education), consisting of simple questions to the novices concerning the Hindu nation and its history and heroes, especially Shivaji. The saffron flag of Shivaji, the Bhagwa Dhwaj, was used as the emblem for the new organisation. Its public tasks involved protecting Hindu pilgrims at festivals and confronting Muslim resistance against Hindu processions near mosques.

Two years into the life of the organisation, in 1927, Hedgewar organised an "Officers' Training Camp" with the objective of forming a corps of key workers, whom he called pracharaks. He asked the volunteers to become sadhus first, renouncing professional and family lives and dedicating themselves to the cause of the RSS. According to scholar Christophe Jaffrelot, Hedgewar embraced this doctrine after it had been reinterpreted by nationalists such as Aurobindo. The tradition of renunciation gave the RSS the character of a `Hindu sect'. Development of the shakha network of the RSS was the main preoccupation for Hedgewar throughout his career as the RSS chief. The first pracharaks were responsible for establishing as many shakhas as possible, first in Nagpur, then across Maharashtra and eventually in the rest of India. P. B. Dani was sent to establish a shakha at the Benaras Hindu University and other Universities were similarly targeted to recruit new followers among the student population. Three pracharaks went to Punjab: Appaji Joshi to Sialkot, Moreshwar Munje to the DAV College in Rawalpindi and Raja Bhau Paturkar to the DAV College in Lahore. In 1940, Madhavrao Muley was appointed as the prant pracharak (regional missionary) in Lahore.

Scholars differ on Hedgewar's motivations for forming the RSS, especially because he never involved the RSS in fighting the British rule. Jaffrelot says that the RSS was intended to propagate the ideology of Hindutva and to provide "new physical strength" to the majority community. An alternative interpretation is that he formed it to fight the Indian Muslims.

Tilakite ideology

After Tilak's demise in 1920, like other followers of Tilak in Nagpur, Hedgewar was opposed to some of the programmes adopted by Gandhi. Gandhi's stance on the Khilafat issue was a cause for concern to Hedgewar, and so was the fact that the 'cow protection' was not on the Congress agenda. This led Hedgewar, along with other Tilakities, to part ways with Gandhi. In 1921, Hedgewar delivered a series of lectures in Maharashtra with slogans such as "Freedom within a year" and "boycott". He deliberately broke the law, for which he was imprisoned for a year. After being released in 1922, Hedgewar was distressed at the lack of organisation among the Congress volunteers for the independence struggle. Without proper mobilisation and organisation, he felt that the patriotic youth of the country could never get independence for the country. Subsequently, he felt the need to create an independent organisation that was based on the country’s traditions and history.

Hindu-Muslim relations

The decade of 1920's witnessed a significant deterioration in the relations between Hindus and Muslims. The Muslim masses were mobilised by the Khilafat movement, demanding the reinstatement of the Caliphate in Turkey, and Gandhi made an alliance with it for conducting his own Non-cooperation movement. Gandhi aimed to create Hindu-Muslim unity in forming the alliance. However, the alliance saw a "common enemy", not a "common enmity". When Gandhi called off the Non-cooperation movement due to outbreaks of violence, Muslims disagreed with his strategy. Once the movements failed, the mobilised Muslims turned their anger towards Hindus. The first major incident of religious violence was the Moplah rebellion in August 1921, which ended in a large-scale violence against Hindus and their displacement in Malabar. A cycle of inter-communal violence throughout India followed for several years. In 1923, there were riots in Nagpur, called "Muslim riots" by Hedgewar, where Hindus were felt to be "totally disorganized and panicky." These incidents made a major impression on Hedgewar and convinced him of the need to organize the Hindu society.

After acquiring about 100 swayamsevaks (volunteers) to the RSS in 1927, Hedgewar took the issue to the Muslim domain. He led the Hindu religious procession for Ganesha, beating the drums in defiance of the usual practice not to pass in front of a mosque with music. On the day of Lakshmi Puja on 4 September, Muslims are said to have retaliated. When the Hindu procession reached a mosque in the Mahal area of Nagpur, Muslims blocked it. Later in the afternoon, they attacked the Hindu residences in the Mahal area. It is said that the RSS cadres were prepared for the attack and beat the Muslim rioters back. Riots continued for 3 days and the army had to be called in to quell the violence. RSS organized the Hindu resistance and protected the Hindu households while the Muslim households had to leave Nagpur en masse for safety. Basu et al. note the accounts of "Muslim aggressiveness" and the "Hindu self-defence" in the RSS descriptions of the incident. The above incident vastly enhanced the prestige of the RSS and enabled its subsequent expansion.