Following the Second National Economic and Social Development Plan (1964–1966), medical demands rose rapidly and the Thai government sought to increase the number of doctors and nurses in the country.

In August 1964, the government cabinet approved the plan of setting up a new medical school which would be located around the Phaya Thai area, on the Thung Phaya Thai grounds owned by the Treasury Department and located opposite the Ministry of Industry.

On December 30, 1965, HM King Bhumibol Adulyadej graciously conferred upon the name of this new medical school "Ramathibodi" and laid the foundation stone for the faculty and hospital's buildings, as well as officially enrolling the first cohort of medical students at the Faculty of Science.

The hospital is located on Rama VI Road, adjacent to the Faculty of Science, Mahidol University and close to Chitralada Royal Villa.

There are six main hospital buildings which serve at least 5,000 out-patient visits per day and in-patients with more than 1,000 beds for tertiary medical care There is a shrine to Prince Abhakara Kiartivongse, Prince of Chumphon, located in the grounds.