The hospital was founded for the sick and the poor by the will of Mary Mercer, who died in 1734 – she had provided a house for poor girls at this location ten years earlier. A number of eminent surgeons took over the running of the hospital. Jonathan Swift was on its first board of governors.
To support funding for the hospital a number of concerts were arranged over the following years. The most significant of these was the first performance of Handel's Messiah, which took place in the Ancient Musick Rooms in Fishamble Street on 13 April 1742. To provide room for a large audience, ladies were requested to lay aside their hoops and gentlemen their swords. By this means an audience of 700 was crowded into the space, and the concert realised £400.
In the 19th century Mercer's was one of the chief teaching hospitals in Dublin; it was located close to several schools of medicine, including Kirby's and the Ledwich school (run by Thomas Ledwich) in Peter St. Ledwich's brother Edward became surgeon and lecturer at the hospital. Among other surgeons who practised there in the latter half of the 19th century were Drs. Butcher, Mason, Nixon and Edward Stamer O'Grady.
In the late 1880s trouble broke out among the staff, leading to charges being brought against Dr. O'Grady, senior surgeon at the hospital. In October 1887 he was accused of insulting his professional colleagues to such an extent that they were unable to work with him. He had also charged one of the members of the board with loitering in the female ward for immodest purposes. Some of the staff left. Lectures were disrupted and the numbers of students fell. The row continued into the 1890s until finally he and most of the staff were dismissed by the governors, and he refused to seek re-election. O'Grady died at home on 18 October 1897.
The current building was designed by J.H. Brett in 1884.
Among the notable physicians who have been associated with Mercer's Hospital are:
- George Daunt (1712–1786) (knick-named "Undaunted Daunt") had an outstanding reputation as a surgeon and for the invention of devices to aid surgery.
- Francis L'Estrange (1756–1836) was born in Westmeath and was educated as a surgeon. In 1779 he was appointed Assistant Surgeon to Mercer's Hospital, where he later became surgeon. He was later appointed Assistant Surgeon to the House of Industry Hospitals, and Surgeon to the Marine School. He engaged in obstetrical practice and was present at the birth of the poet, Thomas Moore (1779). He became president of the Royal College of Surgeons in Ireland in 1796.
- Jonathan Osborne (1794–1864), of Cullenswood House, Dublin, was appointed physician about 1830.
- James Gubbins Fitzgerald (1852–1926), a close friend of Charles Stewart Parnell, was a medical practitioner and an Irish nationalist politician and MP.
- Henry Eames (1842–1873) was a promising young doctor, lecturer in the Ledwich Medical School and writer of medical articles, who died early of typhus.
- Robert Rowlette (c 1879–1944) was a consultant and an independent Teachta Dála (TD). He was later a member of Seanad Éireann.
- Edward L'Estrange Ledwich (1857–1927), great-grandson of the above Francis L'Estrange, was an anatomist and later physician and consultant at the hospital from 1897 to 1927.
- John Lumsden (1869–1944) was the Principal Medical Officer for the Commissioners of Irish Lights, Chief Medical Officer at the Guinness Brewery and founder of the St. John Ambulance Brigade of Ireland.
- Daniel Thomas Croly (1884–1946), born in Achill, was assistant surgeon at the hospital. He was in the RAMC in World War I.
- J. B. Lyons (1922–2007) was a medical historian, writer, physician and professor of medicine.
At the bi-centennial anniversary of the hospital in 1934 the staff included: Charles B. Maunsell, Seton Pringle, Bethel Solomons, William de Courcy Wheeler and Gibbon Fitzgibbon. House physicians were Dr. Wentworth Taylor and Dr. Muriel Smiddy.
- Mercer's Medical Centre
- Irish Society for Archives
- Irish Times, October 1887
- BMJ, 23 October 1897
- Lumsden, John (January 1935). "Personal Reminiscences of Mercer's Hospital". Irish Journal of Medical Science. London: Springer. 10 (01): 19–21. doi:10.1007/BF02957321. Retrieved 15 October 2009.
- Fleetwood, 1983
- Thomas Pleasants
- Dublin Journal of Medical Science, Volume 139, Number 3 / March 1915
- BMJ, 29 March 1873, p. 356
- "Death of Dr. R.J. Rowlette" Irish Times 14 October 1944, p 1
- RIA Dictionary of Irish Biography. p. 394
- History of The St John Ambulance Brigade in Ireland
- Percy Kirkpatrick: Obituaries, Irish Journal of Medical Science, Volume 21, Number 7 / July 1946
- Irish Journal of Medical Science, Issue Volume 177, Number 2 / June 2008
- Irish Times, Bicentenary of Mercer's Hospital, 5 December 1934, p. 5
- Fleetwood, John F (1983). The History of Medicine in Ireland. Dublin: Skellig Press.
- J. B. Lyons (1922–2007), Irish Journal of Medical Science, Springer London, ISSN 0021-1265 (Print), Issue Volume 177, Number 2 / June 2008
- Royal Irish Academy: The Dictionary of Irish Biography, edited by James McGuire and James Quinn. Dublin 2009
- Sonnelitter, Karen (2016). Charity Movements in Eighteenth-Century ireland: Philanthropy and Improvement. Suffolk: Boydell & Brewer. ISBN 9781783270682