During the late 1880s over one quarter of a million Jews lived within one square mile of lower Manhattan. This densely populated neighborhood emerged as the largest Jewish community in the country.

Meager incomes, overcrowding, inadequate sanitation and poor nutrition led to rampant sickness and disease. New and established residents were stricken by measles, scarlet fever, diphtheria, polio, typhoid, pneumonia and influenza. "The white plague of tuberculosis" also known as tailor's disease, struck down the sweatshop workers who comprised a significant portion of the neighborhood's population.

On November 10th, 1889, forty Eastern European immigrants from the garment industry met to discuss the creation of a local health care facility to bring comfort and aid to the ill of the Lower East Side. On December 1st they contributed 25 cents each toward an operating fund to maintain a dispensary in the back of a store on Birmingham Street. The initial fund of $10 did not go far and within two months more money and room were needed to maintain the dispensary and before long, the founders were contributing $125 each toward operating expenses.

On May 22nd, 1890, they received a charter from New York City for the Beth Israel Hospital Association with Dr. Jacob Serling elected the first president. Beth Israel expanded rapidly and members went to work registering subscribers contributing $3 to $5 per year depending on their ability to pay.

The clinic moved to a brief stay on the parlor floor of 97 Henry Street. In May 1891 it moved to 196 East Broadway, a building which had been a twenty patient hospital. With this move, the dispensary was transformed into the first Beth Israel Hospital.

By May 1892, larger quarters were necessary and two connecting buildings at 206 East Broadway and 195 Division St were rented from the Hebrew School.

In 1892, Beth Israel provided 12,131 consultations, accepted 4,776 new patients and dispensed 12,452 prescriptions. The Hospital extended a wide array of health services and charity. In order to help alleviate the harshness of immigrant life, admission policy decreed that patients who could not pay for their care were accepted for treatment. Local merchants came to the aid of Beth Israel with donations and the Ladies Auxiliary Society, formed in 1892, volunteered its services to the hospital.

In 1893, Beth Israel became a member of the Hospital Saturday and Sunday Association (now the Greater New York Hospital Association) and joined the United Hospital Fund.

Beth Israel Hospital at East Broadway/Division Street contained thirty four beds, but it became apparent that more room was needed. Four board members contributed $10,000 and launched the drive for a new hospital building. The cornerstone was laid April 1, 1900 at Jefferson and Cherry Streets.

In 1902, the Eastside celebrated when the new hospital opened with 115 beds. In the new hospital, the emphasis was on patient comfort and the founder's vision of health care for one and all. For a time there was hope the hospital was large enough to bring care to the entire community.