The hospital was founded as Newark City Hospital, which first opened on September 4, 1882 with 25 beds. The College of the Medicine and Dentistry of New Jersey assumed operation of the hospital from the City in 1968 and renamed the entire complex Martland Hospital. The expansion of the College prompted the construction of a new hospital; and College Hospital opened in May 1979. The name was changed to University Hospital in 1981 to recognize the awarding of university status to the College by the state legislature. In November 2012, the New Jersey Medical and Health Sciences Education Restructuring Act provided for most schools and units of the University of Medicine and Dentistry of New Jersey to be transferred to Rutgers, The State University of New Jersey. With this legislation, in July 2013 University Hospital became an independent, standalone medical center owned by the state.
The University of Medicine and Dentistry was involved in a series of adverse circumstances related to over-billing Medicaid from 2001 to 2004. A number of systemic reforms were initiated. Legislation of 2012 separated University Hospital from UMDNJ, and the transition was successfully completed in July 2013.