It is Kowloon Central Cluster's major acute teaching hospital, and also a Neurosurgical and Antenatal Diagnosis referral centre.

Since 1898, after the lease of the New Territories and its incorporation into British Hong Kong, the Han Chinese population living in Kowloon increased rapidly.

The Hong Kong government eventually took up the proposal in 1907 and contributed $139,340 (equivalent to approximately $6 million HKD today) over five years, with the assistance of local charitable organizations, to finish construction of the hospital.

The Tung Wah hospitals attempted a compromise of adapting from the scientific knowledge and effective methods of Western medicine while also providing traditional Chinese medical care, often as a form of placebo.

The hospital ran into funding shortages in its early days due to the relatively low number of wealthy citizens living in the Kowloon area, in contrast to Hong Kong Island.

With the rapid development of Kowloon after World War II, funding from both local charities and the government has increased significantly, and the hospital has experienced over a dozen reconstruction and expansion projects, developing from a single building of 72 beds initially to its modern-day complex of seven towers with several thousand hospital beds.

[citation needed] The hospital played a major role in the SARS epidemic which made its way from Guangdong province to Hong Kong early in 2003.

On 21 February, Liu Jianlun, a 64-year-old Chinese doctor who had treated cases of SARS in Guangdong arrived in Hong Kong to attend a wedding.