Recognizing the need, Governor Epaphroditus Ransom called for the provision of the establishment of an asylum for the insane, and in 1848, the Michigan Asylum for the Insane was authorized by the legislature. Soon afterwards, a site was secured at Kalamazoo, but because of the slow appropriation of funds for the main building, and set-backs due to a fire, the asylum did not open for the receiving of patients until 1859, and the building was not completed as per the plans until 1869.

In the early 1870's, an additional asylum was built at Kalamazoo, adjacent to the original main building and of similar design, the new becoming the male department, and the former becoming the female department.

To supplement the rapidly overcrowding asylum at Kalamazoo, the legislature established the new Eastern Asylum for the Insane in 1873 ( renamed before it even opened to the Eastern Michigan Asylum ), to be located in an Eastern part of the state near the growing population center of Detroit, where many of Kalamazoo's patients where coming from. Members for a locating board were selected, and after considering potential sites at Detroit ( which did not meet all of the requirements of the propsitions ), and at Holly ( which had the advantage of railway lines running both North/South and East/West, but was felt by the board as being too close in proximity to Flint, the location of the Asylum for the Deaf and Dumb , since it was a policy of the state to distribute it's institutions), the Board selected the site at Pontiac known as the "Woodward farm" in June, 1874. This site had the advantages of good soil for farming, a raised elevation that insured pleasant views, fresh air, and good drainage, wells would be able to supply ample fresh water, and it was adjacent to a primary railway line.

Dr. E.H. VanDeusen, Medical Superintendent of the Kalamazoo asylum, supplied the ground plans for the new asylum building, and architect Elijah E. Myers, of Detroit ( who was also the architect for the new State Capital building in Lansing ), prepared the elevation and working drawings . On December 16th, 1874, the Board of Trustees approved the plans , and bids for the construction of the new asylum were called for.

On August 1st, 1878, the Eastern Michigan Asylum opened, receiving 121 men and 100 women from the asylum at Kalamazoo. Total expenditures for the new asylum, including the cost of locating, and cost of land was $448,401.36. By September 30th, 1878, 306 patients had been received.

In 1882, two new wings were added,one extending from the South end, and one from the North end of the main asylum building in symmetry, each connected to the original building by a tower, with an appropriation of $75,000. Charles Anderson of Pontiac provided the plans, and the design corresponded with the "Kirkbride Plan" and architectural details of the original building. The new wings would accommodate 75 patients of each sex.

In 1885 two hospital/infirmary buildings, one for each sex, were authorized by the legislature and were completed within the year. They each had capacity for 75-80 patients, and were located behind the first transverse divisions of the South(male) wing, and the North(female) wing of the main asylum building.

Also in 1885, James Decker Munson, Assistant Medical Superintendent under Henry M. Hurd at the Eastern Michigan Asylum in Pontiac, resigned to accept superintendency of the new Northern Michigan Asylum, in Traverse City, which opened for the reception of patients in November of that year. Forty-five patients were transfered to Traverse City from Pontiac, and approximately 250 from the Michigan Asylum at Kalamazoo. ( Designed by architect Gordon W. Lloyd, the plans of the Northern Michigan Asylum also followed the "Kirkbride Plan", and was modeled after the Pontiac asylum, however the wings were angled slightly forward at the first transverse divisions, and the third halls were rotated forward in true linear design, so that every patient could enjoy the asylum's commanding view of the West Arm of the Grand Traverse Bay, and so that the building would fit the topography of the land.)

An ice famine during the winter of 1889/90 led to the first of two large ice houses built for the storage of ice.

A training school for attendants was established in 1890, the first of it's kind in Michigan, and eighth in the country.

In 1891, 50 acres known as the "Hickey" and "Mawhinney" parcels were added to the asylum grounds. Also, during this year, a slaughter house was built for the asylum farm.

Begining in 1891, the asylum herd of cattle received special attention, and thoroughbreds and registered Holstein Friesian stock replaced grade animals, resulting in an increased supply of milk, and the creation of a herd of cattle that became famous among cattle breeders country wide.

On the evening of December 25th, 1891, a fire broke out and destroyed the interior of the center administration building, as well as some of the adjoining halls. By the Autumn of 1892, the damage had been repaired at a cost of $75,000.

In 1894, the Baldwin and Vinton cottages were occupied.

The farm was increased by 80 acres in 1895 with the addition of the "Seeley" tract.

A new electric light and power plant was built in 1898, and the new laundry building was completed.

In 1899, the Stevens and Kinney cottages were occupied, providing for 100 patients of each sex.

In 1907, the legislature provided for the erection of a new chapel and assembly hall , the original chapel building behind the center administration building to be converted into a congregate dining room, and the ward dining rooms converted into dormitories. In March, 1909, the central dining room opened with provision for 600 patients, with both sexes eating together in the same room.

In 1910, a modern dairy barn was added to the asylum farm.

In 1911, the Eastern Michigan Asylum was renamed as the Pontiac State Hospital, as part of an act to rename the insane asylums as state hospitals, preceded by the name of the city/town in which they were located.

During the 1930's, a modern surgical center and receiving hospital was built, connecting to the front of the center building of the original main building. New wings were also built branching off from the front of the second transverse divisions of both of the North and South wings of the original main building. Later, the fourth floor of the original center building was removed and replaced with a flat rubber roof, and the top of the original entrance tower was also removed flush with the new roof.

Population at the Pontiac State Hospital by 1923 had reached 1,577 patients, in 1929 the total was 1,688. In 1932, there were 1,753, and in 1937 there were 1,818 patients. By 1955, approximately 3,100 patients were residing at the Pontiac State Hospital.

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