In January 1906, Schatz arrived in Jerusalem, and the Bezalel School of Arts and Crafts opened two months later. Bezalel was to be a combined enterprise: an art school and an artisan center, at which various crafts would be taught and articles for daily use produced for sale.
Schatz wanted Bezalel to become a spiritual center for the Jewish people, a cultural and artistic hotbed of new talent. He saw Bezalel as the creative source of the "Hebrew Room," that is, of a visual environment which would serve as inspiration for the creation of a new Jew: a Hebrew, rooted in the land, his life influenced by Jewish values and creative achievement, and surrounded by beauty and harmony.
In 1908 the School moved to two beautiful buildings on what later became Shmuel ha-Nagid Street. Bezalel products were sold at its stall near Jaffa Gate and at dozens of special exhibitions held in European and American cities with large Jewish communities.