Atwater became principal of the Addison County Grammar School in 1799 and, a year later, when the school became Middlebury College, assumed the role of its first president In 1809, Atwater left Middlebury to become the third president of Dickinson College in Pennsylvania. He remained in that position until 1815, when he returned to New Haven, Connecticut, his birthplace and home of his alma mater, Yale University.
Atwater Commons, one of five residential commons at Middlebury, is named for him.
Dickinson College also has an Atwater Hall named for him.
Atwater was elected a member of the American Antiquarian Society in 1815.