It was founded, with the Priory of St Bartholomew, in 1123 by Rahere, formerly a courtier of Henry I. A vow made while sick on a pilgrimage to Rome, and a vision of St Bartholomew, inspired Rahere to found a priory and a hospital for the sick poor at Smithfield in London. In the early medieval period the sick were cared for by the brethren and sisters of the Priory, but gradually the Hospital became independent. It was using a distinctive seal from about 1200, and by 1300 had its own Master. By 1420 the two institutions had become entirely separate.

The Priory was closed as part of Henry VIII’s dissolution of the monasteries in 1539, and although the Hospital was allowed to continue, its future was very uncertain as it had no income with which to carry out its functions. The citizens of London, concerned about the disappearance of provision for the sick poor, and alarmed at the possibility of plague breaking out, petitioned the king for the grant of four hospitals in the City including St Bartholomew’s. Henry finally relented; near the end of his life he issued two documents, one a signed Agreement dated December 1546 granting the Hospital to the City of London, and the other Letters Patent of January 1547 endowing it with properties and income. Along with Bethlem, Bridewell and St Thomas’, St Bartholomew’s became one of four Royal Hospitals administered by the City.

Roderigo Lopez, a native of Portugal, was the first regular physician to be appointed to St Bartholomew’s Hospital, starting work in about 1567. He later became physician to Elizabeth I, but was falsely accused of plotting to poison the Queen and was hung, drawn and quartered.

Barts escaped damage during the Fire of London but many of its properties (together with their income) were lost, necessitating the closure of several wards.

The artist William Hogarth decorated the Grand Staircase with two magnificent paintings that depict the biblical stories of The Good Samaritan and Christ at the Pool of Bethesda and illustrate the spirit of the hospital's work.

The only medieval building now remaining at St Bartholomew’s is the tower of the Church of St Bartholomew the Less. Formerly a chapel of the priory, the church is now a parish whose boundaries coincide with the precinct of the Hospital. All the medieval hospital buildings were demolished during the eighteenth century rebuilding programme, carried out to the designs of architect James Gibbs. The North Wing, which contains the Great Hall, along with the East and West Wings are original Gibbs buildings and Grade I listed. The staircase leading to the Great Hall is decorated with two huge paintings by the artist William Hogarth, depicting the Good Samaritan and Christ at the Pool of Bethesda. The well-known Henry VIII Gate, through which one enters the Hospital from West Smithfield, is also listed and is slightly earlier than the Gibbs buildings, dating from 1702. Other buildings have continued to be added as the need has arisen, including Medical College buildings, nurses’ accommodation and new ward blocks. The Fountain in the Square was added in 1859.

Percivall Pott, the leading eighteenth century surgeon who gave his name to Pott’s fracture and several other conditions, was appointed surgeon.

In 1822 Abernethy persuaded the Hospital Governors to give formal recognition to the Medical School, which had been gradually established during the late eighteenth century

Elizabeth Blackwell, one of the pioneers of medicine as a career for women, was permitted to study at Barts by James Paget, the first Warden of the Medical School and later Serjeant-Surgeon to Queen Victoria.  After Blackwell’s departure female students were opposed and excluded until 1947.

The report did not see Barts as a viable hospital and recommended its closure. The Government’s response to this report was published in 1993 and laid out three possible options for Barts: closure, retention as a small specialist hospital, or merger with The Royal London Hospital and The London Chest Hospital. The threat to Barts sparked an intense public debate and a campaign in which over one million people signed a petition to save the Hospital on its Smithfield site.

After public consultation in 1994, The Royal Hospitals NHS Trust was formed, amalgamating The Royal London, St Bartholomew's and The London Chest hospitals. In addition, Queen Elizabeth Hospital for Children later joined the Trust. The Medical Colleges of St Bartholomew’s Hospital and The Royal London Hospital merged with Queen Mary and Westfield College.

In 1998, The Government announced that Barts was to remain open on its Smithfield site as a specialist cancer and cardiac hospital, a recognition of its continuing innovation in these fields, whilst general hospital services would be concentrated at the Royal London in Whitechapel.