Chapter 131 of the Acts of 1839 established the Boston Lunatic Hospital in the City of Boston. The hospital was built on First Street in South Boston in 1839. Two wings were added in 1846. In 1887, the former Home for the Poor at Austin Farm became an outlying ward of the Boston Lunatic Hospital for chronic and mild cases of insane persons. In 1892, the City purchased Pierce Farm on Walkhill and Canterbury Street and built two hospital buildings. Two new hospital buildings were also built at Austin Farm. By 1895, all patients housed in the hospital at South Boston were transferred to Austin and Pierce Farms. The men were housed on Pierce Farm and the women were housed on Austin Farm. The city sold the Austin Farm and Pierce Farm properties to the Commonwealth of Massachusetts in 1908 after the Commonwealth took over the responsibility for care of the insane.

When the Boston Lunatic Hospital was established in 1839, it was placed under the supervision of the Board of Visitors of the Boston Lunatic Hospital. The Board of Visitors remained in control until 1857 when the Department of Public Institutions was established and control for all public institutions passed to the Board of Directors of Public Institutions. A Board of Commissioners replaced the Board of Directors in 1889; and a single Institutions Commissioner responsible for the new Institutions Department succeeded the Board of Commissioners and the Department of Public Institutions in 1895. Chapter 451 of the Acts of 1897 established the Insane Hospital Department, which had general care and control of the Boston Lunatic Hospital and all other hospitals the City had established or would establish for the care and treatment of the Insane, and the same would be known as the Boston Insane Hospital. Chapter 613 of the Acts of 1908 transferred responsibility of care of the insane to the Commonwealth of Massachusetts.