Betsky, formerly director of the Cincinnati Art Museum, was appointed by the Frank Lloyd Wright Foundation – responsible for funding the school, as well as the maintenance of Lloyd Wright's archive and the Taliesin buildings in Scottsdale and Wisconsin that are used as the school's main teaching venues.
"I am honoured and humbled to have the opportunity to continue the work that for so long made Taliesin into a workshop for reinventing American architecture," said Betsky. "I look forward to continuing its traditions and making the school into the best experimental school of architecture in the country."
Betsky, who trained as an architect at Yale and was director of the 2008 edition of the Venice Architecture Biennale, will be responsible for the school's academic program as well as developing its reputation. He will also have a role in defining the Foundation's other programs.
"He is expected to set the intellectual tone for the school, making it an integral part of contemporary architectural and design discussions at the national and international level," said a statement from the Frank Lloyd Wright Foundation.
The school is facing an uncertain future after a rule change from America's Higher Learning Commission (HLC) threatened to strip its degrees of their formal accredited status.
Founded by Wright in 1932 with his third wife Olgivanna, the school has achieved cult status since for its "learning by doing" approach and only teaches around 20 students at a time.
The HLC, a non-profit organisation responsible for overseeing the accreditation of universities and colleges, told the school that it would lose its accreditation to teach masters programmes from 2017 unless it separates from its parent organisation.
But in August last year, the Foundation's president Sean Malone said that separating the institution from the Foundation was not a viable option as it would cause funding issues.
The school has now launched a campaign to raise the money to operate independently, but is currently still governed by the Foundation. Betsky is encouraging donors to step forward to help with the campaign.
"We wanted a bold thinker and a talented leader, and we found both in Aaron," said Malone.
Betsky will begin his role immediately, succeeding Victor Sidy, who led the school from 2005 and is stepping down to return to his architecture practice, according to the school.
Maura Grogan, chair of the school's board of governors, said: "We sought a director who, like Wright, relishes invention, challenge, and discovery; someone who is excited to chart architecture's next frontier; a person who in a time of conformity understands the beauty of idiosyncrasy; a leader who is ready to speak enthusiastically and persuasively to a profession in need of direction. It is clear to us that Aaron is that person."