The Atascadero State Hospital (DSHA) was opened in 1954 as a state-run, self-contained forensic center designed to house inmates deemed "criminally insane" by the Superior Court, Board of Prison Terms, and/or the Department of Corrections.

Originally opening as “The Great Asylum for the Insane” in 1885 and later called “California Hospital for the Chronic Insane” and “State Asylum at Agnews” (1889), the facility was established by an act of the California Legislature in order to care for the mentally ill.

In 1900, a mental hospital was built on the former site of the Mount Vernon Arsenal in order to help relieve the overcrowding situation at Bryce Hospital, which was located in Tuscaloosa, Alabama. Originally, the hospital was called the "Mount Vernon Hospital" when it opened in 1902 but was renamed "Searcy Hospital" after Dr. J.T. Searcy, the hospital's first superintendent, in 1919.

In 1852, the State of Alabama began planning a state mental hospital under the Kirkbride Plan (an architectural system designed for better patient care) with the input and influence of pioneering psychiatrists Thomas Story Kirkbride and Dorothea Dix. Construction commenced in 1853 based on the designs of Samuel Sloan.