The Indiana legislature authorized the establishment of a "hospital for the insane" as early as 1827, but the actual construction of a facility was delayed for several years.

At that time, the hospital consisted of one brick building situated on a large parcel of land of over 100 acres (0.40 km2) on Washington Street, west of downtown Indianapolis.

From 1848 to 1948, the hospital grew yearly until it encompassed two massive ornate buildings (one for male and one for female patients); a pathological department (which now hosts the Indiana Medical History Museum); a hospital for the "sick insane" for the treatment of physical ailments; a farm colony where patients engaged in "occupational therapy"; a chapel; an amusement hall complete with an auditorium, billiards, and bowling alleys; a bakery; a firehouse; a cannery staffed by patients; and idyllic gardens and fountains.

The Men's Department Building (not a Kirkbride design, but instead known as Straight Block, although it had the same goal of providing patients with access to a window for sunlight and fresh air) had already been demolished over 12 years ending in 1941.

These modern buildings and the medical staff therein continued to serve the state's mentally ill until allegations of patient abuse and funding troubles sparked an effort to forge new alternatives to institutionalization, which, in turn, led to the hospital's closure in 1994.

The land that was acquired consists of 160 acres (0.65 km2) located on the city's westside at the 2800-3300 blocks of West Washington Street.

The developer began further negotiations with the city to determine the future uses, including apartments, shops, and green space.

The building is now named Central State Mansion and retains original features of the architecture as well as decorations suggestive of its history.