Twenty years ago this week, a small basement café opened at 47 Houston Street. Its founder, a 24-year-old would-be music-bizzer named Michael Dorf, was too lacking in experience to really know what he was doing. This proved a great boon.

Mr. Dorf’s efforts to secure major-label glory for a rock band called Swamp Thing — comprised of friends who had arrived in New York, as Mr. Dorf just had, from Wisconsin — were foundering. But he figured this raw space had potential. The monthly rent was $1,800, but he could sleep upstairs and turn the street-front parlor into a performance lounge to pay the bills. To noiseproof the ceiling, he and a friend tacked up a mosaic of decaying thrift-shop sweaters.

“I kept a futon under my desk, and went down the street to Pineapple Fitness to take showers,” Mr. Dorf said, recalling the lack of a full bath on the premises. “I never worked out. They thought I was a real freak.” Not for long, though. The club Mr. Dorf dubbed the Knitting Factory eventually put the entrepreneur, and a generation of New York jazz and rock musicians, on the cultural radar.

The venue, at both its original incarnation and the larger complex in TriBeCa to which it moved in 1994, became synonymous with the genre-blurring downtown music scene of the 1990s. It was a hub for hipsters and a launching pad for many a notable career.

Several of those artists, including Steven Bernstein, Don Byron, Joe Lovano, Lee Ranaldo of Sonic Youth, and John Zorn, will headline a reunion concert at Town Hall on Thursday, celebrating the 20th anniversary of the Old Knit, as fans remember it. Though the club itself never closed, the past few years have seen its booking policies veer from the identity that had originally made it a cultural brand name.

“I had no business plan,” Mr. Dorf said. “I just wanted to be a platform.”

He eventually lost control of its direction after a series of bad business decisions left him beholden to investors. He parted ways with its present management in 2002, although he remains a partial owner.

“I asked myself, do I want to be fighting for what I believe is the right way to run the club, or do I want to create some different opportunities?” Mr. Dorf said, sitting at a desk in his cozy office on Chambers Street, where he has been developing those new projects — including multi-artist concert tributes at Carnegie Hall and Lincoln Center, the Jewish-themed Oyhoo Festival, and the TriBeCa Hebrew School, which houses 130 students. It’s a far more modest slate than the ambitious agenda Mr. Dorf was chasing a decade ago, when he had his hands in pre-broadband Internet projects, a new club in Los Angeles, and the massive Bell Atlantic Jazz Festival, while still running a record label and keeping the New York club afloat. It’s a different era now, and while he’s still ambitious, Mr. Dorf seems to be working within his limits.

He was lucky to launch the original Knit at a time when a lot of different musicians were in need of a roost. The so-called loft scene of the 1970s was phasing out and musicians were scattered about, whether they were peripheral to the downtown performance-art scene, part of an emerging Brooklyn contingent that included Cassandra Wilson and Greg Osby, or avant-garde superstars like Cecil Taylor and Anthony Braxton who had scarce access to more established jazz venues. Charles Gayle, an explosive tenor saxophonist who had lived on the streets, became an international attraction with a stirring run of weekly sessions at the Knittng Factory. Onetime doorman Michael Doughty enjoyed a spell as a quirky pop hitmaker during the 1990s with the band Soul Coughing.

The Old Knit revival recalls that era at the same time that many legendary New York music venues have vanished for good. Two clubs that were equidistant from the original Knit — CBGB and the Bottom Line — have closed in the past two years. Tonic, a Lower East Side space that opened in 1998 and drew the loyalties of many artists who had fallen out with Mr. Dorf, has struggled to stay in business.

Mr. Bernstein, a trumpeter and bandleader whose groups Spanish Fly and Sex Mob were virtually house bands at the Knit, has been among Mr. Dorf’s most vocal fans and critics. “Michael had a lot of business dealings that were really questionable,” Mr. Bernstein said, recalling a time in the late ’90s when the promoter let his imagination and his entrepreneurial zest get out of hand. “But he gave me my first record, my first gigs, my first European tour. Now I’m famous. Grammy nominations, NPR. I’m much more mainstream, and I still can’t get a record company to be interested in me!”

The Old Knit concert also marks a reconciliation with Mr. Zorn, the avant-garde composer who won a MacArthur Foundation grant last year. Thursday’s event will benefit the saxophonist’s Avenue C nonprofit venue, the Stone, which has become a 21st-century evocation of what the Knit represented in 1987. The club is named after the late Irving Stone, who, along with his wife, Stephanie, was virtually a nightly presence at the Knit and benefactor to many musicians on the scene. Mrs. Stone, a pianist herself, is also scheduled to appear at the concert.

“It needs support,” Mr. Dorf said. “Philosophically, I applaud so much of what John is trying to do with the Stone. All the money goes to the artists. No money is generated inside the club. The artists curate the bookings. Whoa!”

Mr. Dorf alluded to potential twists in his own desire to launch a new performance venue, which has been stymied the past few years. But for now, he won’t allow much. He’s happy to know that performers who once rallied against him for higher minimum gig fees are now back celebrating something they all helped create.

“It’s such a warm and humbling experience,” he said, “to have so many artists come out of the woodwork.”