In 1935 the Minnesota legislature established a commission of five members appointed by the governor to locate a fourth state hospital in the northeastern section of the state (Laws 1935 c383). State hospitals had already been established at St. Peter in 1866, at Rochester in 1877, and at Fergus Falls in 1885.
The commission selected land adjacent to the village of Moose Lake in Carlton County. The legislature, at its special session of 1935-1936, confirmed the location and directed the State Board of Control to purchase the land and proceed with construction of building (Laws Ex. Sess. 1935, c5, s1-12). Construction began in November 1936, and the hospital accepted its first patients, transfers from the Fergus Falls and St. Peter state hospitals, on May 2, 1938. The formal opening was held on June 11. The first patients directly admitted from the probate courts arrived at the hospital on August 15, 1938.
The hospital was designed to be an independent community, with administration, medical center, receiving wards for men and women, kitchen, bakery, laundry, powerhouse and sewage disposal units, four dormitories for patients, a nurses' home, and a superintendent's residence. In 1949 two buildings for male and female geriatric patients and a combination auditorium, library, and occupational therapy building were constructed. The hospital was managed by the State Board of Control of State Institutions (or, simply, Board of Control), which was given financial and administrative jurisdiction over all the state hospitals, asylums, and penal institutions. The institution supervisory function passed to the Public Institutions Division of the Department of Social Security in 1939 (Laws 1939 c431; the Board of Control was simultaneously abolished), and to the Medical Services Division of the Department of Public Welfare in 1953. After the mid-1970s this function was performed by the Bureau of Residential Services of the Department of Public Welfare (renamed the Department of Human Services in 1984; Laws 1984, c654).
The hospital was administered by a superintendent, who was assisted by an assistant superintendent and a steward. In 1962 the positions of superintendent and steward were abolished and two new positions were created: medical director and administrator. In 1975 the position of administrator was renamed chief executive officer.
Early treatments used at the hospital included insulin and electroshock, hydrotherapy, and physiotherapy. In the 1950s lobotomies were used on some patients. In 1959, when the Sandstone State Hospital closed, its alcoholic program was transferred to Moose Lake. By 1961, treatment of alcoholism was a specialization of Moose Lake. In 1972 the hospital began a long term chemical dependency program and in 1984 implemented a collaborative inpatient/outpatient chemical dependency program in conjunction with the Northland Mental Health Center in Grand Rapids. In 1966 a program for adolescents was begun, in which some of the participants attended public school and gained high school credits. Also in 1966 all of the hospital's medical/surgical wards were closed. With the closing of the Rochester State Hospital in 1982, Moose Lake received fifty patients, and began development of a specialized geriatric (psycho-geriatric) program.
By the 1980s the hospital had four active programs serving either all of or parts of thirteen counties: St. Louis, Cook, Lake, Koochiching, Itasca, Ramsey, Washington, Chisago, Isanti, Kanabec, Mille Lacs, and Pine. The four programs were mental retardation service, which served only St. Louis, Carlton, Cook, and Lake counties; chemical dependency service, which served all thirteen counties; mental illness service, which served all thirteen counties except Ramsey and Washington; and psycho-geriatric service, which provided service statewide.
In 1985 the institution's name was changed to Moose Lake Regional Treatment Center (Executive Order No. 85-17).
In 1995 the hospital was demolished and patients transferred to the Minnesota Security Hospital.