St. Stephen’s Church and its associated school continued under the leadership of Rev. Atwell and Major Cooke.  In 1870, Atwell reported that the mission was “no longer an experiment.”  Over subsequent years the community improved the property: members trees ornamented the grounds, a new parsonage was built, the building was painted inside and out, the pews were varnished and polished.  But as the church took root and grew, the school branched.

In 1871, Major Cooke decided to open his own private school at the “Old Oak.”  He drew students not only from the Petersburg public schools but also the religious schools.  This was something of a blow to St. Stephen’s Church, which found the disbanding of its students and loss of its teachers to be a hindrance to its work. The challenge resolved itself in 1873 when Atwell was called to a different parish and Major Cooke, who had since become a priest, succeeded him at St. Stephen’s and merged the St. Stephen’s school with his own. On October 1, 1873, Cooke formally established the St. Stephen’s Normal School, focusing extensively on teacher education.

While there remained a need for theological training for Black students seeking Holy Orders, the church did not commit to a dedicated theological training program until 1878, when the Diocese of Virginia had an opportunity to absorb the Zion Union Apostolic Church, consisting of over two hundred Black communicants with their own clergy.  The congregation wanted to keep its clergy; the Diocese wanted the clergy to have an Episcopal theological education. Black theology students were not permitted to study at Virginia Theological Seminary (VTS) in Alexandria, so Gibson added a theological department under the control of the VTS Board of Trustees and headed by Professor Thomas Spencer.

By the 1880s, academic courses included grammar, history, arithmetic, and Latin for male theological students as well as for male and female scholars preparing to be teachers.  There was also a sewing school.  In 1884, St. Stephen’s Normal and Theological School was chartered as the Bishop Payne Divinity and Industrial School, named for the first (white) Bishop of Liberia, by the Virginia State Legislature. It graduated small classes each year, until 1890, when admissions changes reduced the number of Zion Union students and dropped enrollment precipitously.  Nevertheless, it quickly rebounded.

The school was renamed the Bishop Payne Divinity School in 1910, when it was granted the power to confer the Bachelor of Divinity degree.  The seminary operated until 1949, when increased Black enrollment at previously white seminaries reduced its viability as an independent theological school.  In 1953, its assets were transferred to VTS for the purpose of recruiting and educating Black clergy.