It was founded in 1918 by the Roman Catholic Diocese of Portland and the Sisters of Mercy to provide excellent healthcare, especially to the poor and disadvantaged.

In 1941, as the United States stood on the brink of entering another world war, the growing city of Portland needed greater hospital capacity.

To meet this need, the Sisters of Mercy arranged for the purchase of property at 144 State Street.

That same year, the Sisters received additional control from the Diocese of Portland over the management of Queen's.

The old Queen's Hospital buildings were kept for housing and classrooms for the 140 students then enrolled in the School of Nursing.